Summary Comments – May 2025
Uruguay´s Country Risk (as measured by the UBI Index published by República AFAP) stood at 85 as of May 30, 2025, representing a monthly decrease of 11.46%. Over the past 12 months, the index increased by 18.06% despite ongoing volatility in the international geopolitical landscape. For instance the continued war in Eastern Europe, escalating tensions in the Middle East, the tariff war led by the U.S. President, and domestic uncertainty following a recent change in government after last year´s electoral cycle have all contributed to an unstable environment. So far in 2025, the index has registered a variation of 4.49%.
Regarding inflation, according to the publication by the National Institute of Statistics (INE), the data for May 2025 has been released. The Consumer Price Index (CPI) for May 2025 registered a monthly variation of 0.11% with an accumulated increase of 2.82% so far this year and 5.05% over the past 12 months. This keeps the indicator within the target range over the las 12 month period. In fact, it has now remained within the range for two consecutive years – the longest such period since Uruguay adopted the inflation targeted regimen in 2003 – thereby confirming the turning point observed in September 2024, following the acceleration seen in the previous months.
Despite the slight uptick in February (from 5.05% to 5.10%) after a renewed declaration in January , inflation rose in March to 5.67% on a 12-month basis, then decreased to 5.35% in April and continued to decline in May to 5.05%, maintaining the deceleration trend.
The variation observed in the 12-month accumulated figure is due to the replacement of May 2024’s figure (0.40%) with May 2025’s lower reading (0.11%). A key factor in this trend has been the exchange rate, which will be analysed in more detail later.
As a result of previous inflationary pressures—mainly driven by the exchange rate, as noted—the Central Bank of Uruguay (BCU), in its first Monetary Policy Committee (COPOM) meeting of the year, decided to increase the policy interest rate by 25 basis points, from 8.5% to 8.75%, as a measure to prevent inflation from rising beyond expectations. In the subsequent COPOM meeting (February 2025), the BCU raised the rate again from 8.75% to 9.0%, maintaining that level in March. In the April COPOM meeting, the Central Bank increased the policy rate from 9.0% to 9.25%, aiming to steer inflation toward the 4.5% target. This rate was maintained in the May COPOM meeting, thereby consolidating the contractionary phase of monetary policy.
The main contributors—expressed in percentage points to the monthly variation of the general index—came primarily from the divisions Food and Non-Alcoholic Beverages (0.47) and Education Services (0.10).
Below is a summary of the key comments regarding the most significant divisions for the month in question, based on the most appropriate level of aggregation.
FOOD AND NON ALCHOHOLIC BEVERAGES: 1.80%
- Cereals and cereal based products: 1.62% Notable price increases were observed in Fresh Filled Pasta (2.21%) and Empanada Dough (5.92%).
- Meet and meet based products: 1.62%. Notable price increases were recorded for Flank Steak (3.40%), Topside (4.27%), Short Ribs (6.53%), Chuck (5.03%), Shoulder (4.59%), Ribs (4.39%), Sausages (1.79%), and Breaded Beef Cutlets, ready to cook (2.56%).
- Milk, dairy products and eggs: 1.59%. Notable increases were observed in Regular Yogurt (5.57%) and Chicken Eggs (5.50%).
- Fruit and nuts 0.20%. Notable increases were noticed in Lemons (19.15) and Peaches (6.38%); while Apples decreased bi -4.69%
- Vegetable, Tubers and Legumes: 9.81%. Notable price increase were observed in Lettuce (34.64%), Fresh or Refrigerated Spinach (31.65%), Swiss chard (27.48%), Bell Peppers (37.51%), Tomatoes (63.01%), Zucchini and Squash (16.67%), Carrots (7.37%), and Onions, Spring Onions, and Leeks (5.66%).
EDUCATION SERVICES: 2.60%
- Notable increases were observed in Preschool Education (3.13%), Primary Education (3.35%), and Secondary Education (3.52%).
RESTAURANTS AND ACCOMMODATION SERVICES: -0.53%
- This is mainly explained by the decrease in accommodation service prices, specifically Hotels (-17.55%).
Inflation expectations for 2025 among analysts are around 5.5%, according to the survey conducted by the Central Bank of Uruguay (BCU) (5.3% for financial markets in the latest survey from May 2025), while the BCU’s own forecast is 4.5%.
Core inflation (which excludes fruits, vegetables, and fuels) registered a monthly variation of 0.22%, with an accumulated increase of 2.65% for the year and 5.77% over the last 12 months.
Regarding the exchange rate, the interbank cash dollar value as of May 30, 2025, was 41.584; this represents a monthly decrease of -0.87%, a year-to-date decrease of -5.63%, and a 12-month accumulated increase of 7.20%. It is worth mentioning that the monetary authority did not need to intervene in the foreign exchange market during the month to influence the values of the U.S. dollar, nor did it alter the monetary policy interest rate (which was maintained at 9.25%). This rate is used as an instrument to combat inflation (in this case, aiming to guide it to the 4.5% target).
It should be recalled that the increase recorded in September was the largest monthly rise since October 2023, which was again surpassed in November and December. This resulted in nine consecutive monthly increases, with the dollar reaching a five-year high. However, this trend reversed in the first month of 2025, registering a decline of -2.14%, followed by additional decreases of -1.25% in February, -1.08% in March, -0.42% in April, and -0.87% in May, as previously mentioned.
When considering international currency arbitrage, the euro recorded a monthly variation of 0.81%, marking a slight strengthening against the U.S. dollar for the third consecutive month—following five months of opposite performance. The euro also showed a 12-month variation of 5.50% and an increase of 9.96% so far in 2025.
The Argentine peso registered a monthly variation of 0.81%, indicating a further—though mild—depreciation against the dollar. Over the last 12 months, it has risen by 31.85%, and by 14.56% so far in 2025.
The Brazilian real showed a monthly variation of 0.28%, reflecting a slight depreciation against the dollar, partially reversing the trend observed in the previous two months. Over the past 12 months, it has appreciated by 8.22%, while in 2025 it has declined by -8.11%.
In summary, during the month of May, the U.S. dollar strengthened against regional currencies while weakening against the European currency.
The fiscal result for the Central Government – Social Security Bank (GC-BPS) for the 12 months ending in April stood at -3.1% of GDP, the same figure as for the 12 months ending in March. The inflow of funds to the Social Security Trust Fund (FSS), under the provisions of Law No. 19,590, is now considered structural and therefore will no longer be reported separately as of this month. However, its historical magnitude was 0.1% of GDP.
After accounting for other components—such as the performance 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 Global Public Sector (SPG) result stood at -3.7% of GDP, representing an improvement of 0.2 percentage points compared to the 12 months ending in March.
The labour market in April 2025 remained stable compared to the previous month, with an unemployed rate of 8.00% (the same as in March 2025; 7.9% in February 2025; 8.1% in January 2025; and 7.4% in December 2024). The unemployment rate continues to perform better than pre-pandemic levels)
Underemployment stood at 9.6%, showing a slight deterioration compared to previous months (9.1% in March 2025, and 9.0% in both January and February 2025; 9.1% in December 2024; 9.0% in November; 8.8% in October; 9.5% in September; and 9.4% in August). Informality remained at 22.3%, unchanged from March 2025, which had improved compared to February (22.5%), January (21.3%), and December 2024 (21.2%), which had already improved relative to November and October (both 21.7%); informality was 21.9% in September and 21.4% in August. In both cases, figures reflect relative stability.
The activity rate in April stood at 64.6%, similar to previous months with minor fluctuations. It showed a slight improvement compared to March, when it remained unchanged from February at 64.5%. February had seen a 0.01% decrease from January, which was equal to December. December’s rate was 0.1% higher than November, which in turn was 0.2% above October (which had increased by 0.4% over September, following a 0.3% rise from August). The April 2025 figure also compares favourably to April 2019 (pre-pandemic), when the activity rate was 61.5%. The employment rate stood at 59.5%, improving from March 2025 (59.3%) and slightly down from February (59.4%), which had remained unchanged from January. In December and November, the rate was 59.8%; in October, 59.6%; in September, 59.5%; in August, 59.1%; and in July, 58.8%. Overall, these figures are better in both year-over-year comparisons and relative to 2019.
The Average Wage Index (IMS) recorded a year-over-year variation of 5.95% as of April 2025 (compared to 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). This growth exceeds the inflation rate, indicating an increase in real wages, although full recovery to pre-pandemic levels has not yet been achieved. The monthly variation was 0.42%, bringing the accumulated increase for the year to 4.61%. On a 12-month moving basis, as previously mentioned, the increase is 5.95%.
The Tax Administration (DGI) published the preliminary revenue report for April 2025, which shows the following:
Net revenue (after tax refunds) recorded a real year-over-year variation of -1.7%.
Meanwhile, gross revenue at current prices showed a nominal variation of 2.00% in April. However, when adjusting for inflation, the real year-over-year variation in revenue was -3.10%.
Regarding Foreign Trade, Uruguay XXI issued its report for May.
In this report, based on information from the Union of Exporters of Uruguay (U.E.U.), it is noted that exports (including Free Trade Zones) increased by 1% year-over-year in May.
According to the foreign trade reports prepared by the Union of Exporters and Uruguay XXI, exports of beef, pulp, and vehicles were key drivers of export growth in May 2025. Conversely, lower demand for soybeans, rice, and meat by-products negatively impacted monthly performance.
In the accumulated period of the first five months of 2025, exports of goods, including Free Trade Zones, showed a year-over-year increase of 4%.
The balance for the first five months of 2025 was positive. Beef which saw a year-over-year growth of 35% during this period, solidified its position as the top exported product. Pulp remained in second place, with a 24% increase compared to the same period last year. The top five were rounded by soybeans, beverage concentrates, dairy products and rice, although the latter showed a decline in year-over-year terms. Notably, vehicle exports experienced a significant year-over-year increase in of 43%.
The main products exported in May 2025, in order, the following:
Beef exports reached U$S 256 million in May 2025, with a year-over-year growth of 36% and over 36 thousand tons shipped, consolidating it as the top exported product of the month. The United States remained the main destination, with shipments worth US$ 83 million and 11 thousand tons, representing a 45% increase compared to May of the previous year and accounting for 32% of total exports. It was followed by the European Union with US$ 75 million and 7 thousand tons, doubling exports from the previous year, and China with US$ 62 million and 13 thousand tons, a 23% increase in value. Noteworthy exports were also made to the United Kingdom, Brazil, Switzerland, Canada, Israel, and Japan.
In second place, pulp totalled US$ 203 million in May 2025, with a year-over-year increase of 10%. China was the main destination, purchasing US$ 92 million. The European Union followed with shipments worth US$ 78 million. Turkey and the United States each reached US$ 10 million. Significant shipments were also recorded to South Korea, Argentina, and Indonesia.
Soybean exports reached US$ 124 million in May 2025, representing a 31% year-over-year decline and a decrease in exported volume from 422 thousand to 319 thousand tons. China remained the main destination, purchasing US$ 76 million and 197 thousand tons, although with a significant contraction compared to the previous year. Shipments were also made to the United Kingdom, Algeria, Nigeria, Peru, Brazil, and the United States, albeit at significantly lower values. The overall decline was also due to lower prices: in 2024, the average price per ton was US$ 4282, while in May 2025, the price dropped to US$ 389, a 9% year-over-year decrease.
Exports of beverage concentrates totalled US$ 70 million in May 2025, representing a 10% year-over-year decline and a contraction in exported volume from 4 thousand to 3.3 thousand tons. Mexico remained the leading destination, with shipments worth US$ 14 million and 889 tons, followed by Guatemala with US$ 12 million and Brazil with US$ 9 million. Significant shipments were also recorded to Honduras, Colombia, Costa Rica, El Salvador, and Jamaica. The overall decline was explained by lower demand from Mexico and several Central American markets, partially offset by increases in some destinations in the Caribbean and South America.
Dairy products totalled US$ 66 million in May 2025, representing a 10% year-over-year decline and a reduction in exported volume from 20 to 17 thousand tons. The main exported product was whole milk powder, which generated US$ 54 million in revenue and accounted for 82% of the total value in the category, although it recorded decreases in both value and volume. This was followed by cheese with US$ 7 million, butter with US$ 3 million, and to a lesser extent, whey and other dairy products. Algeria led the destinations with purchases of US$ 25 million, followed by Brazil with US$ 21 million. Significant shipments were also noted to Chile, Argentina, Mexico, and Panama.
Rice exports reached US$ 56 million in May 2025, representing a 31% year-over-year decrease in value and a 7% drop in volume, with 120 thousand tons shipped. Mexico was the main destination, with purchases totalling US$ 25 million and 68 thousand tons, followed by the European Union with US$ 13 million. Shipments were also made to Brazil, Peru, Turkey, the United Kingdom, Chile, Costa Rica, and smaller-volume markets such as Israel, Panama, and Canada. The difference between the variation in value and volume was explained by a decline in the average price per ton, which fell from approximately US$ 636 in May 2024 to US$ 468 in 2025, representing a 26% decrease.
Vehicle exports generated US$ 44 million in revenue, reflecting a 43% year-over-year increase. Brazil was the leading destination, with purchases totalling US$ 29 million, accounting for 66% of the total. It was followed by Argentina with US$ 7 million, and by Paraguay and Chile with smaller amounts. The growth was driven by higher shipments to the main regional markets.
Other products recorded declines. Meat by-products totalled US$ 42 million and 27 thousand tons in May 2025, reflecting a 16% year-over-year decrease in value and a 5% drop in volume. The average price per ton fell from US$ 1,829 to US$ 1,573, which explains part of the decline. Wood and wood products reached US$ 39 million and 199 thousand tons, showing no significant variation compared to the previous year. In the case of live cattle, exports amounted to US$ 29 million and 29 thousand tons, representing a 11% decrease in value and a 10% drop in volume, with a slight reduction in the average price per ton.
The main export destinations in April, in that order, were China, the European Union, Brazil, the United States, and Mexico.
China was the main export destination in May 2025, with sales totalling US$ 271 million and a 15% year-over-year decrease. The decline was mainly due to a 51% drop in soybean shipments, partially offset by higher exports of pulp, beef, and meat by-products. The main exported products were pulp (US$ 92 million), soybeans (US$ 76 million), and beef (US$ 62 million). Notable shipments also included meat by-products (US$ 20 million), along with smaller volumes of fish, precious stones, dairy products, and wool.
The European Union ranked as the second-largest export destination in May 2025, with shipments totalling US$ 206 million, representing a 43% year-over-year increase. Pulp led the exports with US$ 78 million, followed by beef with US$ 75 million and wood with US$ 12 million. Notable exports also included rice, margarine and oils, meat by-products, pharmaceutical products, and citrus fruits.
In third place, Brazil stood out with a total of US$ 160 million, reflecting an 18% year-over-year decrease. The most exported products were vehicles, totalling US$ 31 million, followed by dairy products with US$ 21 million, and plastics and plastic manufactures with US$ 18 million. Significant exports also included rice, unprocessed barley, beverage concentrates, and malt.
The United States ranked fourth among export destinations in May 2025, with shipments totalling US$ 129 million and a 25% year-over-year increase. Beef was the main exported product, with US$ 83 million in shipments, followed by pulp with US$ 10 million, and citrus fruits with US$ 7 million. Other notable exports included medical devices and instruments, meat by-products, honey, and beverage concentrate.
Mexico was the fifth-largest export destination in May 2025, with sales totalling US$ 48 million, representing a 35% year-over-year increase. Rice led the exports with US$ 25 million, followed by beverage concentrate with US$ 14 million, and wood with US$ 2 million. Other exports included dairy products, textiles, leather, and pharmaceutical products.
It is also important to once again highlight the growing relevance of service exports. To illustrate the significance of this sector, it is enough to note that in 2024, services accounted for 30% of the country’s total exports.
Within this chapter, we find traditional service exports such as transportation and related services, tourism (which includes, among others, gastronomy, hospitality, transfers, etc.), as well as non-traditional services, which could be classified as global services. These include professional and consulting services in various fields (IT, finance, communications), intellectual property, personal, cultural and recreational services, technical, business, and others.
