Brazil & Southern Cone - July 2026

Uruguay has long enjoyed a reputation as a beacon of institutional stability in Latin America. President Yamandú Orsi himself was elected on pledges not to rock the boat and to continue in the Uruguayan tradition of centrist, consensus politics. But as Orsi himself has found it, stability alone has not been enough for the small South American country to attract investment, and his government has announced a new bill aiming to improve Uruguay’s growth prospects and competitiveness.

Last year Uruguay’s economy was one of the slowest to expand in Latin America, with the central bank registering an annual growth rate of 1.8% in 2025, well below previous estimates. Meanwhile, neighbouring Brazil and Argentina grew 2.3% and 4.4%, respectively. And this year is not looking much better for the nation of 3.5m inhabitants, with the central bank projecting annual growth to slow to 1.3% in 2026.

“Uruguay’s economy continues to benefit from strong macroeconomic fundamentals, controlled inflation, and favourable access to financing,” Spanish bank BBVA wrote in a research note on 16 June.  “However, it faces the challenge of boosting investment to raise productivity and ignite new drivers of growth.” One of the underlying problems is that the country is inefficient and costly, both for citizens and business owners, and hamstrung by excessive regulations. The country boasts elite talent and world-class stability, but it remains bogged down by administrative friction. Uruguay’s modest 68th-place ranking in the World Intellectual Property Organization (Wipo)’s 2025 Global Innovation Index underscores this reality.

And so, the Orsi administration on 10 June unveiled a sweeping legislative proposal aiming to boost competitiveness and reduce the cost of living, and to stimulate investment and employment. With more than 240 articles, the package represents an ambitious regulatory overhaul designed to dismantle bureaucratic inertia, open up tightly controlled domestic markets, and directly lower the cost of living for everyday consumers. Its proposals include centralising registries, digitalising notaries, and allowing simultaneous filings that allow parallel processing of permits across multiple state departments to radically cut wait times. If a government office fails to respond to a standard administrative request within a strict, predetermined timeframe, the request is automatically deemed approved. To crack down on abusive pricing or monopolistic activities, the bill grants significantly greater functional and financial autonomy to the national antitrust authority. It will possess the authority to launch its own proactive investigations into anti-competitive behaviour and price-fixing, rather than merely responding to external complaints.

Micro, small, and medium-sized enterprises (Mipymes), which generate the vast majority of employment in Uruguay, will be provided free digital business management suites to help them digitize. The bill also introduces flexible tax brackets to prevent small businesses from facing sudden, punitive cost cliffs when graduating from one tier to the next, and it establishes controlled regulatory sandboxes that allow fintech firms to test cutting-edge tools without excessive regulations.

“This is a modest but deeply important reform of the state. The ultimate goal is simple: to make Uruguay a more competitive country and a less costly place to build a life,” Economy and Finance Minister Gabriel Oddone said.

Low approval

An opinion survey by national pollster Cifra in June showed that President Orsi’s approval rating stood at a mere 20%, while his disapproval rating was 65%. This is one of the worst approval ratings for a Uruguayan head of state this century, with the record held by former president Jorge Batlle (2000-2005), whose popularity tumbled to 8% in 2003.