Investor confidence surges despite Uruguay's growth stalling below 1%.

Uruguay today completed a $1.25 billion international debt operation that, according to Economy Minister Gabriel Oddone, drew demand more than double the Ministry of Economy and Finance's expectations, marking the day's most emphatic signal of the country's financial credibility. The issuance, structured in two tranches — nominal peso-denominated and dollar-denominated bonds — was completed with a rate below 7% on the local-currency component, an achievement the minister described as a "successful operation" that, in his words, "demonstrates the confidence in Uruguay." The government also simultaneously executed a buyback of older global bonds, improving the maturity profile of the sovereign debt.

The transaction lands at a moment of particular political relevance for the Frente Amplio's economic team. In Parliament, the Consejo Fiscal Autónomo warned lawmakers of a presumed overstatement in the growth projections included in the Rendición de Cuentas. Oddone responded with a position that yields no ground: "Projection errors or deviations are commonplace," he stated, while reaffirming that the Uruguayan economy is on a "recovery path," though he acknowledged there is "a fairly high probability" that 2026 growth projections will be revised downward. The opposition Coalición Republicana refused to vote on the Rendición de Cuentas, to which Oddone responded firmly: "I will not give up on negotiating."

This tense political-fiscal landscape coexists with mixed activity signals. The Ceres Leading Index fell again, reinforcing signs of weakening economic activity, while the Central Bank itself acknowledged that the economy closed 2025 with annual growth of just 1.8%, below official forecasts, and that the first quarter of 2026 posted expansion of between 0.8% and 0.9%, driven mainly by private consumption and exports. The government grew "almost entirely on carryover" in 2025, as analysts themselves acknowledge, and 2026 began, in technical terms, "at zero to zero." The World Bank cut its projections to 1.6% for this year.

Against this backdrop, the government is betting on a portfolio of large-scale private investments to reactivate the economy: green hydrogen, data centers and a new pulp mill stand out as the three vectors on which authorities are pinning their hopes to meet committed growth targets. In parallel, the Economy Ministry is advancing a competitiveness bill — informally consulted with Argentina's Federico Sturzenegger — aimed at reducing costs and red tape without altering the tax structure, given that Oddone has ruled out new tax hikes during the current administration.

On the external front, the arrival of the IMF's Managing Director in Uruguay to meet with President Yamandú Orsi added an element of international scrutiny amid calls for greater fiscal effort. The Fund's mission is closely tracking the deficit trajectory, which closed 2025 at 4.1% of GDP, in line with MEF projections, though La Diaria noted that from a medium-term perspective that figure reflects a debt legacy that grew more than ten percentage points of GDP during the prior period.

In the energy sector, UTE announced progress toward a third 500-kilovolt transmission corridor to strengthen supply to the south of the country, after completing the closure of the northern electric ring. The investment in electrical infrastructure is consistent with the government's strategy of attracting energy-intensive industries such as data centers and green hydrogen. In the fossil energy segment, state refiner Ancap consolidated crude from Argentina's Vaca Muerta formation as a key piece of its supply, signaling deeper regional energy integration with Buenos Aires, though the situation in Argentina and Brazil continues to be flagged by analysts as the main external risk factor for the Uruguayan economy, whose competitiveness is affected by the exchange rate against the Brazilian real.

For the weeks ahead, the items to monitor are precise: the evolution of parliamentary negotiations around the Rendición de Cuentas and whether Oddone manages to build the consensus needed for its approval; second-quarter 2026 performance as the first genuine signal of whether the economy can sustain the first-quarter rebound; the pace of the competitiveness bill; and the commitments the government undertakes vis-à-vis the IMF during the Managing Director's visit. The Economy Minister's upcoming trip to London to "strengthen economic and financial ties" adds another dimension to a foreign agenda that the government is using as a credibility lever at a time when the domestic front remains more complex.

**ANCAP (state-owned, not listed)** — Uruguay's state refiner has consolidated Vaca Muerta crude as a central input for its operations, deepening reliance on Argentine supply at a time when YPF, whose ADRs trade on NYSE, is accelerating output in the Patagonian formation. ANCAP's exposure to Argentine pricing and FX policy introduces an operational risk that the Uruguayan government is monitoring closely.

**UTE (state-owned, not listed)** — The state electricity company is advancing construction of a third 500 kV transmission corridor targeting the south of the country, an infrastructure investment aimed at supporting projected demand from data centers and green hydrogen industries — sectors in which international operators, including Google, as confirmed by the government, are evaluating projects to establish operations in Uruguay.