IMF Mission Chief Says Uruguay Has Room to Be More Ambitious on Growth

IMF mission chief for Uruguay, Raphael Espinoza, asserts the nation possesses potential to pursue more ambitious growth objectives. In a statement released by Montevideo daily El País on October 4th, Espinoza argued that stability alone is insufficient to drive the growth Uruguay requires. This came following the International Monetary Fund's annual review, which concluded on September 24th.

Staff noted growth averaged just 1.2% since 2016, a rate too low to catch up with high-income countries. The IMF's mission in Montevideo from September 14th to 24th revised its 2026 growth forecast to 1.3%, with expectations of 2.4% in 2027. Espinoza explained this to El País, noting that aside from 2020-2021 pandemic and the historic 2023 drought, the economy has grown around 2.1% annually.

He highlighted consumption, accounting for about 80% of GDP, expanding at 2.5%. Fixed investment increased 9.5% year on year in real terms during the second quarter of 2026. He acknowledged monetary policy as "accommodative," which should assist output reaching its capacity. Finance Minister Gabriel Oddone later described the IMF's assessment as "adequate" on September 28th, Subrayado reported.

The government aims for a primary deficit of 0.1% of GDP in 2029, encompassing central government and the state social-security agency. The IMF suggests a surplus of 0.5% instead. Espinoza stated that debt to GDP remains roughly stable in the Fund's baseline, so the goal is a declining trajectory. Increasing effort could be phased in gradually, he added.

Options include reviewing tax incentives, many established decades ago, moderating the public wage bill, and performing spending reviews in health and education. These reviews should be gradual and evidence-based. Regarding the pending pension bill restoring retirement at 60, he cited BPS actuarial work indicating negligible effect.

A full assessment awaits the final text, he said. Espinoza welcomed the competitiveness bill, stating that licensing to operate or import takes considerably longer in Uruguay than in the rest of the region. Approximately one in five firms cites access to finance as a major hurdle. Logistics and energy costs are not addressed in the bill, though the government has them on its radar.

He also advocated state-company reform, proposing wages tied to productivity and cost-based pricing. He defended Uruguay's consensus politics as a foundation for enduring policy. "Stability alone cannot generate the growth increase" Uruguay's social model requires, he asserted, urging "calculated risks" with discipline. The IMF expects inflation to align with the 4.5% target, with a gradual rise in the policy rate to a neutral level.

The Central Bank's (BCU) rate committee convenes this week, reports Ámbito on September 29th. On September 28th, 28-day BCU bills traded at 5.94%, above the 5.75% policy rate, suggesting a 25 basis-point increase. Analysts surveyed by the BCU anticipate a rise within six months. The IMF board has not yet examined the staff report, and the complete document remains non-public.

The pension bill's final shape is also uncertain, as the BCU's move remains unclear. Earlier coverage of the IMF's 1.3% forecast presented the government's more optimistic outlook. Sources include El País (Uruguay), written interview with IMF mission chief Raphael Espinoza on October 4th, 2026; El País report on the IMF mission on September 25th, 2026; IMF, Uruguay: Staff Concluding Statement of the 2026 Article IV Mission, September 24th, 2026; Infobae, September 29th, 2026; Uypress, September 25th, 2026; Subrayado, September 28th, 2026; and Ámbito, September 29th, 2026.

This report was generated by The Rio Times' automated newsroom system. Details on AI utilization · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief, LatAm Markets Live: real-time movers, turnover leaders and FX across Latin America.