Uruguay’s Hidden Poverty: 18.9% Face Multidimensional Struggles

Uruguay’s National Statistics Institute (INE) reports that 18.9% of the nation’s 3.4 million people—about 661,000—live in multidimensional poverty.

Unveiled on February 19, 2025, the first Multidimensional Poverty Index (IPM) exposes gaps beyond the 9.1% income-based poverty rate from early 2024. This new measure, launched days before a government shift, paints a fuller picture of hardship.

The INE, partnering with the UN Development Programme and Oxford experts, crafts the IPM using household survey data. It tracks 15 indicators across education, housing, jobs, and social protection, flagging poverty when four or more hit.

On average, the poor lack five indicators, revealing layered struggles unseen in income stats alone. Figures show 17.5% of Uruguayans live where adults miss schooling years, while 13% face informal work without benefits.

The interior suffers most, with 21.4% in poverty, far above Montevideo’s 15.1%, despite the capital housing nearly half the population. This rural-urban split highlights unequal access to basics like education and stable jobs.

Uruguay long boasts low poverty in Latin America, dropping from 32.5% in 2006 to 9.7% in 2014 through solid policies. Yet, the IPM shows money alone doesn’t fix everything, as structural issues linger post-COVID recovery under President Lacalle Pou.

The index now offers businesses and policymakers a tool to target real needs. INE Director Diego Aboal calls it a game-changer, giving a broad view for smarter solutions.

Uruguay’s Multidimensional Poverty Index

UN representative Alfonso Fernández de Castro agrees, noting its value for sustained policy design. Developed since 2022, the IPM aligns Uruguay with global trends, like Colombia’s success in slashing multidimensional poverty.

The numbers tell a story of uneven progress, with rural areas and informal workers hit hardest. Companies eyeing Uruguay’s market—stable yet nuanced—now see where gaps lie: education, jobs, housing.

Annual updates will track changes, guiding investments and reforms as the new government steps in. This isn’t just data—it’s a wake-up call. Multidimensional poverty affects nearly one in five Uruguayans, urging practical action.

Businesses and leaders can’t ignore the 661,000 lagging behind in a nation often praised for equity. The IPM lays bare the challenge ahead.