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Economic recovery may prove vulnerable in Uruguay

Wednesday, June 21, 2017


President Tabare Vazquez’s government will face a congressional debate over the 2018-20 budget marked by the high fiscal deficit. Although ratings agencies are showing confidence by renewing Uruguay’s investment grade rating, this will only be maintained if an austere budget is approved -- at a time when the government has lost its lower house majority.


  • The government faces unsatisfied demands from various sectors which cannot readily be addressed without increased investment and spending.
  • This in turn would undermine the fiscal position, which has been improved by an adjustment that still did not resolve underlying issues.
  • Some improvement in growth will give the government a degree of breathing space.

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