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In partnership with the Inter-American Development Bank (IDB), the Uruguayan government is advancing efforts to enhance the country’s fiscal framework to reinforce macroeconomic stability and attract long-term investment.
At a high-level seminar titled “Proposals to Further Strengthen the Fiscal Framework in Uruguay” held at the Radisson Montevideo, Economy, and Finance Minister Gabriel Oddone and IDB Uruguay Representative Luiz Ros underscored the importance of institutional reforms to Uruguay’s fiscal rule. The event marks part of a broader public dialogue series supporting policy adjustments ahead of the national budget proposal.
Strengthening Transparency and Market Confidence
Oddone emphasized the strategic role of fiscal institutions in shaping market perceptions and investor confidence.
“Uruguay understands that a sound fiscal framework that is transparent, productive, and credible is critical for market access and for signaling reliability to investors,” Oddone said. “Ultimately, our focus is on growth. The only sustainable path to social protection and stability is through higher levels of private investment.”
The minister signaled the government’s intention to evolve the current fiscal rule by enhancing its transparency and clarity, while maintaining a balance between fiscal discipline and flexibility appropriate for a small, open economy.
Institutional Enhancements Underway
A key aspect of the reform involves strengthening oversight bodies. Oddone announced plans to:
- Empower the Fiscal Advisory Committee with greater independence and resources.
- Provide Uruguay’s Committee of Experts with more robust guidelines to improve fiscal estimations.
- Propose a budget bill that includes clearer targets and measurable fiscal metrics.
The goal, he said, is to have a modernized, transparent framework in place by the time the next national budget is presented.
Global Best Practices and Local Adaptation
The event featured two expert panels, including insights from Oscar Valencia, IDB’s Principal Fiscal Specialist in Washington, who provided an overview of best practices in fiscal rules across Latin America. Consultants Jorge Rodriguez and Hermann Gonzalez shared findings from their analysis of Uruguay’s current framework and outlined recommendations for strengthening it.
“Uruguay is seeking a fiscal rule that is simultaneously credible, adaptable, and anchored in long-term growth,” said Gonzalez.
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