• Abundant agricultural and forestry resources
  • Social homogeneity and political stability
  • Active reform policy (business environment, public finance, social security coverage)
  • Substantial foreign direct investment
  • Member of Mercosur, privileged trade relations with the EU and the United States
  • Free Trade Zones, Free Port and Free Airport regimens
  • Strategic geographical location to be the Regional Distribution Center in LatAm


  • Economy vulnerable to commodity prices (soya, meat, dairy products)
  • Dependence on the Argentine, Brazilian and Chinese economy
  • Inadequate transport infrastructure
  • Public debt (mitigated by a longer maturity and less and less in dollars)


In 2018, Uruguay’s growth slowed due to weather conditions and the unfavorable regional context (recession in Argentina and sluggishness in Brazil). The drought has severely affected the agricultural sector, particularly soybean production, whose exports have fallen. In 2019, inflation will gradually decrease, but will remain above the target (3%-7%), leading to stagnation or even a decline in household purchasing power, with wage increases set by agreement between 6% and 8%, depending on the sector’s level of activity. Growth is therefore expected to remain limited, despite the increase in investment related to the start of work on the Ferrocarril Central rail infrastructure project in January. The goal of the project is to facilitate the transport of goods to the port of Montevideo (public-private financing estimated at USD 800 million). It is part of the negotiations with the Finnish group UPM for the possible construction of a third pulp mill, which would be the largest private investment ever made in Uruguay (USD 4 billion). UPM is required to make a decision on this matter before February 2020. In addition, as Argentina (the leading source of FDI and tourists) was affected last year by a major crisis whose effects will continue to be felt in 2019, the external contribution to growth should remain negative, despite the slight acceleration in Brazilian demand. The trade surplus declined in 2018 due to the fall in agricultural and energy exports caused by drought, as well as the increase in imports of intermediate goods and equipment in line with the recovery in investment. In 2019, exports are expected to grow thanks to the rebound in agricultural production and the improved economic situation in Brazil, Uruguay’s main export partner (along with China). However, at the same time, imports are expected to continue to grow faster in the wake of investment. Despite wide room for improvement in terms of financial transparency, Uruguay is one of the preferred destinations for FDI in the region, thanks to a generally favorable business environment.