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JULY 2025 SUMMARY COMMENTS
In the recently concluded month of July, the evolution of the indicators we have been monitoring was as follows:
Uruguay’s Country Risk (measured by the UBI Index published by República AFAP) stood at 70 as of 07/31/2025, representing a negative monthly variation of 11.39%. Likewise, over the past 12 months, this index showed a negative variation of -17.65%, despite the volatility during this emerging period of international geopolitics (for example, the ongoing war situation in Eastern Europe, along with tensions in the Middle East, the tariff war promoted by the U.S. President, and the domestic climate, with a recent change in government following last year’s electoral cycle). So far in 2025, this indicator has shown a negative variation of -13.58%.
Regarding inflation, according to the publication by the National Institute of Statistics (INE), the data for July 2025 was released. The Consumer Price Index (CPI) for July 2025 recorded a monthly variation of 0.05%, a year-to-date accumulated variation of 2.79%, and 4.53% over the last 12 months. With this, the indicator remains within the target range over the past 12 months (in fact, it has now completed twenty-six consecutive months within that range, representing the longest period under such conditions since the inflation targeting regime was adopted in 2003), thus confirming the turning point seen in September 2024 from the acceleration observed in the four months prior to that date. Overall, in the first month of the year, a return to deceleration was observed in the accumulated rolling 12-month figure, with a very slight increase in February (from 5.05% to 5.10%), followed by an acceleration in March reaching 5.67%, and a decline in April to 5.35%. A similar trend occurred in May, dropping to 5.05%, then to 4.59% in June, continuing the same path with a decrease to the aforementioned 4.53% in July. The variation observed in the 12-month accumulated rate is due to July 2024 (which had a rate of 0.36%) dropping out of the calculation, and the entry of July 2025 (at 0.05%), which was lower.
Consequently, given the previous inflationary pressures—mainly stemming from the exchange rate, as previously mentioned—the Central Bank of Uruguay (BCU), in the first Monetary Policy Committee (COPOM) meeting of the year, decided to increase the benchmark interest rate (monetary policy rate) by 25 basis points, raising it from 8.5% to 8.75%, as a tool to prevent inflation from rising beyond expectations. In the following COPOM meeting (February 2025), the BCU authorities again increased the rate, from 8.75% to 9%, and maintained that level in March. In the April COPOM meeting, the rate was raised from 9% to 9.25% (in this case, aiming to guide inflation toward the 4.5% target), and it was kept at that level in the May meeting. In the July COPOM, the BCU lowered the rate back to the previous 9% (justifying the decision by citing the decline in inflation and the sustained drop in inflation expectations, which reached historical lows), thereby consolidating the contractionary phase of monetary policy. Moreover, the BCU aims not only for inflation to remain within the target range (3%–6%) but to converge toward the midpoint of that range (4.5%). In this regard, the figure of 4.53% recorded at the end of the seventh month of the year is considered encouraging.
The main contributions come primarily from the following divisions: Food and non-alcoholic beverages (0.08), Clothing and footwear (-0.05), Housing (-0.07), Recreation, sports and culture (-0.04), Restaurants and accommodation services (0.04), and Personal care, social protection, and miscellaneous goods (0.05). The contributions are expressed in percentage points of the variation in the general index.
Below is a summary of the comments corresponding to the most notable divisions for the reference month, according to the most appropriate level of aggregation.
FOOD AND NON-ALCOHOLIC BEVERAGES: 0.31%
- Cereals and cereal-based products: -0.02%
Price decreases were recorded for Dry pasta (-3.68%) and increases for Biscuits (0.95%).
- Fresh, chilled or frozen meat: -0.49%
Notable price drops were seen in Rump steak (-3.05%), Ground beef (-0.62%), and Short ribs (-0.70%). Lamb meat showed an increase (3.33%).
- Milk, other dairy products, and eggs: -0.38%
Price declines were observed in Plain yogurt (-2.18%) and Chicken eggs (-2.26%), while Mozzarella cheese saw an increase (2.85%).
- Fresh citrus fruits: -7.71%
Significant price drops were registered in Lemons (-15.94%), Oranges (-6.48%), and Mandarins (-5.99%).
- Vegetables, tubers, and legumes: 4.95%
Price increases were recorded for Lettuce (12.64%), Spinach, fresh or chilled (17.10%), Swiss chard (10.98%), Bell peppers (8.50%), Tomatoes (21.75%), Zucchini and squash (70.84%), and Onions, spring onions, green onions (4.42%); while price decreases were noted in Carrots (-7.92%) and Potatoes, baby potatoes (-2.56%).
CLOTHING AND FOOTWEAR: -2.00%
- The price decreases are mainly due to end-of-season autumn-winter sales on items such as Women’s coats and jackets (-10.90%) and Women’s boots (-7.55%).
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS: -0.56%
- This is mainly explained by the drop in the price of liquefied petroleum gas (LPG), specifically in gas cylinder refills (-8.69%).
TRANSPORT: 0.17%
- Price increases were notable in Diesel fuel (2.23%), Gasoline (0.32%), Vehicle mechanical repairs (1.28%), and Airfare (9.89%). Price decreases were recorded for Cars or pickup trucks (-2.35%), Tires, inner tubes, and covers (-4.56%), and Chauffeured passenger transport (-1.43%).
RECREATION, SPORTS AND CULTURE: -0.70%
- Price decreases were observed in International travel packages (-3.65%).
RESTAURANTS AND ACCOMMODATION SERVICES: 0.45%
- A price increase was noted in services provided by restaurants, cafés, and similar establishments (0.49%).
PERSONAL CARE, SOCIAL PROTECTION AND MISCELLANEOUS GOODS: 1.03%
- Notable price increases were recorded in Personal care products and services (0.96%), and in Notary services (2.81%).
The Central Bank of Uruguay’s (BCU) July Inflation Expectations Survey shows that the average of surveyed analysts forecasts a price increase of 4.68% for 2025 and 5% for 2026. Similarly, the July Business Expectations Survey conducted by the National Institute of Statistics (INE) projects inflation of 5.5% for 2025 and 6% for the following year.
Meanwhile, core inflation (which excludes fruits, vegetables, and fuels) registered a monthly variation of 0.03%, an accumulated variation of 2.77% so far this year, and 5.25% over the last 12 months. In this respect, it is observed that although it remains slightly above the general index, it showed a slight deceleration compared to the previous month, and it also continues to remain within the target range.
Regarding the exchange rate, as of July 31, 2025, the interbank exchange rate for the US dollar stood at 40.196, reflecting a monthly increase of 1.64%—the first rise in 2025—a year-to-date decline of 8.78%, and a 12-month decrease of 0.19%. Notably, the monetary authority did not intervene in the foreign exchange market to influence the US dollar’s value during the month. However, it did adjust the monetary policy interest rate, reducing it from 9.25% to 9.00% on July 8, 2025, as part of its strategy to combat inflation and steer it toward the 4.5% target. It’s important to recall that the increase recorded in September 2024 was the largest monthly rise since October 2023, a trend that was again surpassed in November and December 2024. This resulted in nine consecutive monthly increases, with the dollar reaching a five-year high. This upward trend was reversed in the first month of 2025, with a decline of 2.14%, followed by further decreases of 1.25% in February, 1.08% in March, 0.42% in April, 0.87% in May, and 4.90% in June. The 1.64% increase in July marked the first rise of the year.
Regarding international arbitrage, in July 2025, the Euro experienced a negative variation of -2.93%, weakening after four consecutive monthly increases against the US dollar. Despite this monthly decline, the Euro showed a 12-month appreciation of 5.55% and a year-to-date increase of 9.84%. The Argentine Peso depreciated by 13.94% against the US dollar in July, marking a significant weakening. Over the past 12 months, the Peso has depreciated by 46.95%, and in 2025, it has declined by 32.73%. The Brazilian Real appreciated by 3.12% against the US dollar in July, reversing the trend observed in the previous month and aligning with the performance of the two months prior. Over the last 12 months, the Real has depreciated by 0.68%, and in 2025, it has declined by 9.46%. In summary, during July, the US dollar strengthened against all three currencies analysed.
In other news, various data regarding economic activity were released, of which we highlight the most relevant:
The fiscal result for the twelve months ending in June for the Central Government – Social Security Bank (GC-BPS) stood at -3.7% of GDP, deteriorating by 0.3% of GDP compared to the twelve months ending in May.
GC-BPS revenues amounted to 27.1% of GDP, decreasing by 0.1% of GDP compared to the twelve months ending in May, due to lower revenues from the Central Government. This decrease is attributed to the twelve-month measurement no longer including the payment of profits from the Bank of the Eastern Republic of Uruguay (BROU) to the Central Government, which was made in June 2024.
GC-BPS primary expenditures were 28.3% of GDP in the twelve months ending in May, representing an increase of 0.2% of GDP compared to the previous month. This increase is primarily due to higher non-personnel expenses and investments by the Central Government.
On the other hand, the interest payments of the GC-BPS amounted to 2.5% of GDP, remaining unchanged in terms of GDP compared to the previous month.
After considering other components, such as the results of public enterprises, revenues and expenditures of the GC-BPS, the result of the Non-Monetary Public Sector, and the overall result of the Central Bank of Uruguay (BCU), the result of the Global Public Sector (SPG) was -4.4% of GDP, deteriorating by 0.4% of GDP compared to the twelve months ending in May.
In June 2025, Uruguay’s labour market showed improvement compared to the previous month, with the unemployment rate at 7.30% (down from 7.80% in May; 8.00% in April; 8.00% in March; 7.90% in February; 8.10% in January; and 7.40% in December 2024), indicating a better situation than before the pandemic.
Underemployment stood at 9.2% (an improvement from 9.3% in May, 9.5% in April, and 9.1% in March; it was 9.00% in both January and February; 9.1% in December 2024; 9% in November; 8.8% in October; 9.5% in September; and 9.4% in August), and informality was at 21.9% (a slight deterioration from 21.6% in May, which had improved from 22.3% in April, and remained unchanged from March; it had improved from 22.5% in February; 21.3% in January; and 21.2% in December 2024; it was 21.7% in October and 21.9% in September; and 21.4% in August), both showing relative stability.
In June 2025, the labour market showed improvement compared to the previous month, with the activity rate at 64.2% (similar to previous months, although it shows two consecutive declines with slight fluctuations up and down; in this case, it decreased slightly compared to May, when it was 64.4%, which in turn had worsened compared to April, when it was 64.6%, which had improved slightly compared to March, when it remained the same as February at 64.5%, which in turn decreased by 0.01% compared to January, which was the same as December, which was 0.1% higher than November, which in turn was 0.2% higher than October, which had increased by 0.4% compared to September, which in turn increased by 0.3% compared to August); and also better compared to April 2019 (pre-pandemic), when it was 61.5%), and the employment rate at 59.5% (reversing the one-tenth decline in May, when it was 59.4% and fell compared to April, when it was 59.5%, which improved compared to March 2025, when it was 59.3% and had a slight setback compared to February 2025, when it remained unchanged at 59.4% compared to January 2025; in December, it was 59.8%, the same value as November; in October, it was 59.6%; in September, it was 59.5%, while in July, it was 58.8% and in August, 59.1%). Nevertheless, these figures are better in the year-on-year comparison and also compared to 2019.
As of June 2025, the Average Wage Index (IMS) showed an annual variation of 6.05% (compared to 6.08% in May; 5.95% in April; 5.83% in March; 5.81% in February; 5.77% in January; 6.39% in December 2024; 6.47% in November; 6.75% in October; and 6.95% in September), surpassing the inflation rate, indicating real wage growth. However, it has not yet fully recovered to pre-pandemic levels. The monthly variation was negligible, resulting in a year-to-date cumulative change of 4.68%. When considering the moving annual average, the improvement stands at 6.05%, as previously mentioned.
As of the date of drafting this report, the DGI has not yet published the preliminary revenue report for July 2025.
Regarding Foreign Trade, Uruguay XXI released its report for July.
According to a report from the Union of Exporters of Uruguay (U.E.U.), exports—including those from Free Zones—rose by 7.4% year-on-year in July.
In this regard, according to foreign trade reports prepared by the Union of Exporters and the Uruguay XXI Institute, exports of beef, soybeans, and cellulose (the latter despite experiencing a decline) were key drivers of export growth in July 2025. Conversely, reduced demand for cellulose, vehicles, and meat by-products negatively impacted monthly performance.
The main products exported in July 2025 were, in this order, the following:
Beef emerged as the leading export product this month, with shipments totalling US$224 million, marking a 49% year-on-year increase and accounting for 19% of total goods exports. In volume, over 32,000 tons were exported, reflecting a 20% growth. Additionally, beef was the product with the highest contribution to monthly growth, at 7%. Regarding destinations, China remained the primary market, purchasing US$75 million worth and over 15,000 tons, representing an 80% increase compared to July 2024. The United States followed with US$58 million and 7,000 tons, while the European Union accounted for US$47 million and 4,000 tons. Notable shipments were also made to Israel and the United Kingdom.
Soybeans ranked second with growth of 14%, amounting to US$ 199 million. China was the primary destination, accounting for US$ 174 million in purchases, which represented 87% of the sector’s sales. It was followed by Egypt, with shipments totalling US$ 14 million, and Indonesia with US$ 9 million. Exports to Brazil were also recorded.
Pulp followed, with US$ 126 million and a 17% decline. China was the main destination for Uruguayan pulp, purchasing US$ 54 million worth—marking a 28% year‑over‑year increase. The European Union ranked second despite a 62% drop, with total shipments of US$ 29 million. Finally, Brazil, which registered no purchases in July 2024, came in third with US$ 27 million in acquisitions. These three destinations accounted for 88% of the sector’s exports.
Beverage concentrates reached US$ 73 million, marking a 12% increase. Latin America remained the sector’s main focus, with Guatemala leading sales at US$ 16 million, followed by Mexico with US$ 9 million and Brazil with US$ 8 million. There were also shipments to Honduras, El Salvador, Colombia, and Ecuador. Meanwhile, dairy products—with a similar total—grew 9% compared to 2024. Whole milk powder was the leading sub-product, with US$ 46 million in sales. The standout destinations were Algeria, at US$ 23 million, and Brazil, at US$ 21 million. These two destinations accounted for 60% of the sector’s exports.
Rice reached US$66 million in July 2025, representing a year‑on‑year increase of 32% and a rise in export volume from 74,000 tonnes to 153,000 tonnes. Mexico led as the top destination with purchases amounting to US$25 million, followed by Brazil with US$15 million. Notable shipments were also made to the European Union, Mauritania, and Peru.
Finally, exports of live cattle showed a significant increase, reaching nearly the same level as in 2024, totalling US$ 54 million. Turkey was the main destination, with purchases of US$ 25 million and 8,000 tonnes, followed by Israel with US$ 15 million. Exports were also recorded to Morocco.
The main export destinations in June were, in that order, China, Brazil, the European Union, the United States, and Mexico.
China was the primary export destination in July 2025, with sales reaching US$ 345 million—a 20% year‑on‑year increase. Soybeans, the main product traded, amounted to US$ 174 million in July. Additionally, the monthly growth was mainly driven by the year‑on‑year surge in beef exports, which rose by 80%. Furthermore, key bilateral trade products such as pulp, wood, and meat by‑products also saw year‑on‑year growth, contributing to the improvement in trade.
In third place was the European Union, with sales totalling US$117 million and a year-on-year decline of 13%. Despite the overall drop, beef saw a remarkable year-on-year increase of 102%, reaching US$47 million. The monthly decrease was driven by a fall in pulp sales, which dropped by 62% to US$29 million in July. Rice, wood, and citrus were also prominent export products during the month.
The United States ranked fourth, with total exports amounting to US$ 100 million and a 5% increase compared to those exported in July 2024. Beef again stood out as the main product, reaching US$ 58 million in sales with a 36% year‑on‑year growth. It was followed by meat by‑products with US$ 10 million, pulp with US$ 8 million, and wood with US$ 7 million exported.
Mexico was the fifth-largest export destination, with purchases totalling US$ 43 million—more than double the amount exported in July 2024. This increase was primarily driven by a significant rise in rice exports, which reached US$ 25 million (compared to US$ 1 million the previous year). Alongside this growth, other staple products sold to the Latin American country, such as beverage concentrates, wood, and dairy products, remained stable.
