KEY POINTS
- Poverty rate fell to 14.8% in H1 2026, down 2.9 percentage points from 17.7% a year earlier.
- Indigence dropped to 1.2%, and approximately 100,000 people exited poverty over the past year.
- The improvement is tied to inflation near the 4.5% target and wage increases for lower-income sectors.
Uruguay’s poverty rate fell to 14.8% in the first half of 2026, a decline of 2.9 percentage points from the same period last year, according to data released Wednesday by the National Institute of Statistics (INE).
The figures, first reported by El Observador, show that 148 out of every 1,000 people did not surpass the minimum income required to cover basic food and non-food needs.
Indigence fell to 1.2% from 1.8% in the first half of 2025, while the percentage of households below the poverty line dropped to 11.6% from 13.9%.
Approximately 100,000 people left poverty over the past year, according to Braulio Zelko, director of macroeconomic advisory at the Ministry of Economy and Finance. He wrote on X that the decline is consistent with labor market performance and income policy, which contributed to a 4.3% increase in household income.
INE sources attributed the improvement to contained inflation near the Central Bank of Uruguay’s 4.5% target and to wage increases for lower-income sectors prioritized in the latest round of wage councils. President Yamandú Orsi called the data “a significant improvement” but acknowledged that much remains to be done.
Macro Stability Anchors Investor Confidence
For international investors and expatriates, the poverty reduction reinforces a narrative of social cohesion alongside macroeconomic discipline. The IMF projects Uruguay’s GDP growth will moderate to 1.3% in 2026, largely due to the prior drought’s impact on agriculture, while the fiscal deficit is expected to widen to 4.1% of GDP. Fitch’s affirmed BBB sovereign rating with a stable outlook, combined with these income-policy gains, suggests that Uruguay’s institutional strengths continue to provide a stable platform, even as structural growth challenges warrant monitoring.
