Uruguay's markets love it; its economy is collapsing quietly.

The Rendición de Cuentas that Minister Gabriel Oddone delivered to Parliament today arrives at a moment of visible internal tensions: the government is proposing to expand public spending by roughly one billion dollars while simultaneously facing criticism from independent economists over anemic growth, signs of weakening in leading indicators, and a country risk premium that, paradoxically, sits at historic lows. It is that contradiction — financial solidity in the markets, fragility in the real economy — that defines Uruguay's economic moment today.

Oddone defended before the opposition in the Senate that the additional spending contemplated in the Rendición de Cuentas does not compromise fiscal targets, since it will be financed with revenues already approved in 2025, including the new IMESI tax applied to electric vehicles. This last point has opened an unusual rift within the government itself: the ministries of Environment and Industry publicly distanced themselves from the Ministry of Economy, arguing that the levy contradicts the energy transition policy. Industry Undersecretary Sebastián Vallcorba tried to contain the political damage by noting that 66% of electric vehicles will not be affected at all, but the dispute laid bare that the search for fiscal resources is colliding with sectoral objectives within the cabinet itself.

In parallel, the government presented a legislative initiative with more than 240 measures aimed at improving competitiveness and reducing the cost of living, ranging from regulations on the toothpaste trade to the fintech ecosystem. The breadth of the project reflects the official diagnosis: Uruguay faces a structural cost problem that requires cross-cutting surgery, not a targeted intervention. That diagnosis is shared, at least at the diagnostic level, by the private sector: according to a recent survey, most firms anticipate stability in 2026 but continue to flag competitiveness as their main concern.

The macro backdrop against which this agenda arrives is complicated. The economy grew just 0.8% in the first quarter of the year relative to the fourth quarter of 2025 — although figures from Búsqueda and some consultancies point to 0.9% — at a time when the Ceres Leading Index has fallen again, reinforcing signals of deceleration heading into the rest of 2026. Oddone himself acknowledged to La Diaria that there is "a fairly high probability" of revising growth projections for this year downward. The Central Bank has already trimmed its estimates, and several private analysts place annual expansion below 1%. The close of 2025, with growth of 1.8% — well below the 4.4% posted that year in its strongest stretches, driven by finance, agriculture and mining — left the economy starting 2026 "zero to zero," in the phrase used by several analysts.

There are, however, signals that temper the pessimism. The country risk premium sits at its lowest level since 2018, and analysts surveyed by El Observador expect it to keep declining, a reflection of market confidence in Uruguay's institutional and fiscal solidity. June inflation rose 0.4%, taking the year-on-year rate to 4.3%, within the Central Bank's target range, and historically one of the lowest readings in decades. Knowledge Economy services exports hit a record, while the wheat sector projects a contribution of nearly 3.9 billion dollars following a historic harvest. Household disposable income, measured after fixed expenses, halted its decline after seven consecutive months of deterioration — an incipient but relevant signal for private consumption.

On the port front, Terminal Cuenca del Plata (TCP) denounced a situation of "extreme gravity" following the strike called by the union, describing the labor demands as "unviable" and warning of external influences in the conflict. The episode matters because the port of Montevideo is a critical node in the regional logistics chain; a prolonged shutdown would directly hit foreign trade flows in Mercosur.

On the strategic front, the Ministry of Economy took the first formal step toward drawing up a roadmap for OECD membership, an objective the government has presented as a symbol of its reformist ambition. At the same time, the government is defending the continuation of the Régimen de Incentivos para Grandes Inversiones (RIGI) as a growth engine, targeting a potential pipeline of 150 billion dollars in investment. Oddone also warned of the risks of a potential "negative shock" in energy prices stemming from the conflict in the Middle East, an external variable that could complicate projections in the coming months.

What will bear close monitoring is whether the competitiveness bill secures parliamentary approval in its original design or ends up diluted in political negotiation, whether the TCP port conflict escalates into a prolonged strike that affects agricultural exports, and whether second-quarter activity data confirm or refute the incipient recovery only faintly hinted at in the first quarter. The Senate interpellation of Minister Oddone, meanwhile, signals that the debate over the AFAPs and the government's fiscal policy will remain a front of political tension in the weeks ahead.

**Terminal Cuenca del Plata (not publicly traded; operated by APM Terminals, a subsidiary of A.P. Møller-Mærsk, listed on the Copenhagen Stock Exchange: MAERSK-B)** — Uruguay's largest port terminal declared a situation of "extreme gravity" before Parliament following the start of a union strike, denouncing "unviable" demands and outside interference in the conflict. A prolonged shutdown would directly affect Mercosur cargo flows and Uruguay's logistics competitiveness as a regional hub.

**ANCAP (state-owned, not publicly traded)** — Uruguay's state-owned refinery posted losses of 41 million dollars in the first half as a result of the impact of the rising dollar on its financial liabilities, at a time when Minister Oddone flagged the risk of a negative energy price shock stemming from the conflict in the Middle East. ANCAP's FX exposure represents a contingent fiscal risk for the government given the company's status as a state-owned enterprise.