{
  "title": "Uruguay: Selected Issues",
  "publication": "IMF Staff Country Reports, May 23, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2023/05/23/uruguay-selected-issues-533686",
  "canonical": "https://www.imf.org/en/publications/cr/issues/2023/05/23/uruguay-selected-issues-533686",
  "overlayPath": "/en/publications/cr/issues/2023/05/23/uruguay-selected-issues-533686/index.md",
  "summary": "This Selected Issues paper explores fiscal consolidation measures that could generate the savings needed to lower debt. In Uruguay, the authorities’ policies, together with a favorable macroeconomic environment, have led to a decline of the public debt-to-gross domestic product ratio to pre-pandemic",
  "sections": [
    {
      "heading": "Fiscal outlook and risks",
      "content": "- The paper explores fiscal consolidation measures that could generate the savings needed to lower debt.\n- Authorities’ policies, together with a favorable macroeconomic environment, have led to a decline of the public debt-to-gross domestic product ratio to pre-pandemic levels.\n- Short-term risks are low, and debt is sustainable, yet a sequence of unfavorable shocks such as a prolonged increase in international interest rates and a growth slowdown could lead to further increases in debt.\n- The associated primary balances that would be needed to reach a certain debt level would depend on the assumed transition time."
    },
    {
      "heading": "Analysis of revenue and spending structure",
      "content": "- Recent initiatives to focus value-added tax (VAT) exemptions and to reduce rates to recipients of social programs are steps in the right direction to reduce tax expenditures and the regressivity of the tax.\n- An analysis of the structure of revenues and spending suggests possible measures to reduce the fiscal deficit.\n- A reduction of energy subsidies and a full implementation of targeted VAT would increase the efficiency of spending and lead to non-negligible savings."
    },
    {
      "heading": "Key findings and implications",
      "content": "- Fiscal consolidation is feasible through targeted measures on tax expenditures and subsidies.\n- The timing (transition time) of consolidation matters for the primary balance path required to achieve debt targets.\n- Policy actions that both increase efficiency and reduce regressivity (targeted VAT, narrowing VAT exemptions) are highlighted as priorities."
    },
    {
      "heading": "Policy recommendations (implicit from analysis)",
      "content": "- Focus VAT exemptions to limit tax expenditures.\n- Reduce VAT rates for recipients of social programs rather than broad-based exemptions.\n- Implement targeted VAT fully.\n- Reduce energy subsidies to improve spending efficiency and generate savings.\n\n---\n\n Content in this bundle\n\n- Uruguay: Selected Issues; IMF Country Report No. 23/179; April 26, 2023\n  - Uruguay: Selected Issues; IMF Country Report No. 23/179; April 26, 2023 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Uruguay: Selected Issues; IMF Country Report No. 23/179; April 26, 2023 (PDF){rel=\"external\" type=\"application/pdf\"}"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/cr/issues/2023/05/23/uruguay-selected-issues-533686/index.md)",
    "[Structured JSON version](/en/publications/cr/issues/2023/05/23/uruguay-selected-issues-533686/index.json)",
    "[Bundle manifest](/en/publications/cr/issues/2023/05/23/uruguay-selected-issues-533686/bundle-manifest.json)",
    "Published: May 23, 2023",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400244346.002",
    "The paper explores fiscal consolidation measures that could generate the savings needed to lower debt.",
    "Authorities’ policies, together with a favorable macroeconomic environment, have led to a decline of the public debt-to-gross domestic product ratio to pre-pandemic levels.",
    "Short-term risks are low, and debt is sustainable, yet a sequence of unfavorable shocks such as a prolonged increase in international interest rates and a growth slowdown could lead to further increases in debt.",
    "The associated primary balances that would be needed to reach a certain debt level would depend on the assumed transition time.",
    "Recent initiatives to focus value-added tax (VAT) exemptions and to reduce rates to recipients of social programs are steps in the right direction to reduce tax expenditures and the regressivity of the tax.",
    "An analysis of the structure of revenues and spending suggests possible measures to reduce the fiscal deficit.",
    "A reduction of energy subsidies and a full implementation of targeted VAT would increase the efficiency of spending and lead to non-negligible savings.",
    "Fiscal consolidation is feasible through targeted measures on tax expenditures and subsidies.",
    "The timing (transition time) of consolidation matters for the primary balance path required to achieve debt targets.",
    "Policy actions that both increase efficiency and reduce regressivity (targeted VAT, narrowing VAT exemptions) are highlighted as priorities.",
    "Focus VAT exemptions to limit tax expenditures.",
    "Reduce VAT rates for recipients of social programs rather than broad-based exemptions.",
    "Implement targeted VAT fully.",
    "Reduce energy subsidies to improve spending efficiency and generate savings.",
    "**Uruguay: Selected Issues; IMF Country Report No. 23/179; April 26, 2023**"
  ],
  "related": [
    {
      "title": "Uruguay: Selected Issues; IMF Country Report No. 23/179; April 26, 2023",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/cr/2023/english/1uryea2023002.pdf",
      "summary": {
        "path": "/-/media/files/publications/cr/2023/english/1uryea2023002.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/cr/2023/english/1uryea2023002.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/cr/issues/2023/05/23/uruguay-selected-issues-533686/index.md",
    "json": "/en/publications/cr/issues/2023/05/23/uruguay-selected-issues-533686/index.json",
    "bundleManifest": "/en/publications/cr/issues/2023/05/23/uruguay-selected-issues-533686/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-11T19:39:26.307Z"
}