Uruguay’s Economic Growth Forecast for 2024 Revised to 3.35%: A Regional Comparison

Uruguayan economic analysts revised their 2024 growth projection to 3.35%, down from May’s 3.49% forecast.

This change emerged from the median of the Expectations Survey released by the Central Bank of Uruguay (BCU).

The survey consulted economists and financial institutions, revealing a range of predictions. The most pessimistic forecast predicts a 2.90% GDP increase, while the most optimistic expects a 5.00% rise.

Uruguay’s economy grew just 0.6% in the first quarter of 2024 after a 0.4% rise in 2023. Drought conditions and the end of major projects contributed to this slow growth.

Nevertheless, the government of President Luis Lacalle Pou projects a 3.5% growth by year’s end.

For 2025, central bank analysts expect a median GDP growth of 2.50%, matching last month’s forecast.

Additionally, the survey predicts a 5.50% inflation rate for 2024, with 0.30% expected for June.

Inflation has slowed significantly, increasing only 4.1% in the year ending in May. This marks the lowest rate since 2005.

Consequently, this analysis shows varied financial sector expectations, highlighting potential recovery and future challenges for Uruguay’s economy.

Background

Uruguay’s economic forecast for 2024 predicts a 3.35% GDP growth, which positions it competitively within the region.

Here’s how it compares with its Latin American peers based on recent analyses:

Brazil

Brazil’s economic outlook has shown some optimism, with projections indicating a GDP growth of around 2.09% to 2.5% for 2024.

This reflects slight improvements and resilience amidst challenges like political uncertainties and global economic pressures.

Argentina

Argentina faces significant economic difficulties. Analysts expect a modest 2.0% growth for 2024, with high inflation rates remaining a critical issue.

However, the IMF has forecasted a more positive growth of 5% by 2025, driven by stabilization efforts.

Chile

Chile’s economy is anticipated to grow by 3.0% in 2024, benefiting from ongoing reforms and improved economic conditions.

The country is also experiencing a positive inflation outlook, suggesting a more stable economic environment compared to previous years.

Mexico

Mexico has recently revised its 2024 growth forecast downward from 2.8% to 2.4%, reflecting concerns over a global economic slowdown and internal economic struggles.

Despite these adjustments, the country remains cautiously optimistic about moderate growth.

Colombia

Colombia is expected to see improvements in its economic indicators for 2024.

The forecast includes growth and challenges, aiming for stability in inflation and overall economic performance.

Paraguay

Paraguay stands out with a robust forecast of 4.5% GDP growth for 2024.

This strong performance is attributed to solid agricultural output and increasing foreign investments, positioning it as one of the region’s better-performing economies.

Peru

Peru anticipates a 3.8% GDP growth in 2024, driven by mining exports and domestic demand recovery.

The country projects inflation to stabilize around 3.9%, indicating a favorable economic trajectory.

In summary, Uruguay’s 3.35% GDP growth forecast for 2024 is relatively strong within the context of Latin American economies.

While not the highest, it demonstrates resilience and potential for steady economic recovery.

Uruguay’s inflation rate of 5.50% for 2024 is higher than some of its peers, indicating areas where economic policy can further improve to ensure stability and growth.