Date of Release: November 24, 2021

DBRS Morningstar Changes Trend on Uruguay to Positive, Confirms at BBB (low)

Industry Group: Public Finance – Sovereigns
Region: Americas

DBRS Inc. (DBRS Morningstar) confirmed the Oriental Republic of Uruguay’s Long-Term Foreign and Local Currency
– Issuer Ratings at BBB (low). At the same time, DBRS Morningstar confirmed the Short-Term Foreign and Local
Currency – Issuer Ratings at R-2 (middle). The trend on all ratings has been changed to Positive from Stable.

KEY RATING CONSIDERATIONS

The Positive trend reflects DBRS Morningstar’s view that Uruguay’s fiscal outlook has improved due to fiscal
consolidation efforts and institutional improvements to the budgetary framework. While spending rigidities remain a
medium-term credit challenge, tight expenditure control by the Lacalle Pou administration and the phasing out of
pandemic-related programs next year should help put public finances in a more sustainable position. Some of the upward
pressure on the ratings also stems from the cumulative effects of gradually diversifying Uruguay’s economy and
reducing the country’s exposure to external shocks.

The Uruguayan economy bounced back from the pandemic in the first half of 2021 but the recovery was uneven. While
a large wave of COVID-19 cases from March to June delayed the revival of private consumption, investment and
exports expanded quickly. Fixed capital formation increased 21% in real terms in the first six months of the year relative
to the prior year. The boom in investment was driven by the construction of a large new pulp mill in central Uruguay and
an associated railroad project. Goods exports also increased markedly, due to a pick-up in global demand and higher
prices for agricultural commodities. While consumption underperformed, the outlook is better for the second half of
2021 and for 2022. New COVID-19 cases are now at low levels and 75% of the population is fully vaccinated. Uruguay
reopened its borders in November to vaccinated non-residents, which should support the tourism sector. In addition, high
frequency unemployment insurance data points to a recent strengthening in the labor market. Overall, growth prospects
look better than in the pre-pandemic period. The IMF projects GDP growth of 3.2% in 2022 and 2.7% in 2023.

The confirmation of Uruguay’s BBB (low) ratings balances its strong political and macroeconomic fundamentals with its
medium-term fiscal pressures, modest productivity growth, a partially dollarized financial system, and limited financial
depth. The political environment is characterized by high-quality public institutions, low levels of corruption, and
predictable macroeconomic policymaking, all of which constitute an important source of credit strength. Risks stemming
from volatility in the region are elevated. However, ample foreign exchange reserves, conservative public debt
management, diversified export markets, and sound regulation of the banking system bolster the economy’s defenses to
potential shocks.
RATING DRIVERS

The ratings could be upgraded if the government continues to implement a durable consolidation in the fiscal accounts.
Increased investment that boosts potential growth and deepens domestic financial markets could also be credit positive.

The ratings could be downgraded if (1) there is a sustained reversal in the fiscal trajectory, or if (2) external buffers
erode over time, thereby weakening Uruguay’s resilience to adverse shocks. The trend could return to Stable if the fiscal
consolidation plan materially underperforms or external shocks significantly weaken Uruguay’s recovery prospects.

RATING RATIONALE

Fiscal Accounts Are Consolidating On The Back Of Tight Expenditure Control

The government has made progress in its multi-year fiscal consolidation plan. The headline central government deficit
(excluding the “cincuentones” pension transfers) is expected to narrow from 5.8% of GDP in 2020 to 4.9% this year,
even as the government has continued to provide emergency support to households and firms affected by the pandemic.
As emergency expenditures expire and the cyclical recovery advances, the deficit is projected to decline further to 3.1%
in 2022, nearly 1 percentage point better than before the pandemic in 2019.

In DBRS Morningstar’s view, several features of the plan are helping to advance the fiscal adjustment. First, the
response to the pandemic has been targeted and temporary. The government created a COVID-19 Solidarity Fund to
ensure that pandemic-related spending does not become permanent. Fiscal support via the Solidarity Fund was 1.1% of
GDP in 2020 and is estimated to be 1.7% in 2021. The Fund is expected to be wound down in early 2022. Second, the
government is tightly controlling costs. Non-emergency expenditure has declined in real terms over the last two years
and the government is committed to modest overall spending increases during the remainder of its term. This
expenditure-based consolidation should narrow the deficit to 2.3% by 2025. Third, reforms to the fiscal framework
enhance the credibility of the plan. In particular, the establishment of a structural fiscal rule should foster counter-
cyclicality and sustainability over the medium term. The government adhered to the fiscal rules in 2020 and looks set to
do the same in 2021.

Notwithstanding the improving fiscal outlook, keeping public finances on a sustainable trajectory remains a key
challenge for the credit. Prior to the COVID-19 shock, the fiscal deficit was widening due to rising current expenditures.
Although spending has been tightly controlled during the pandemic, the rigidity of certain expenditure items, such as
healthcare and pensions, could increasingly exert pressure on fiscal accounts over time. The government established an
advisory council to propose adjustments to the pension system to ensure financial sustainability. The final
recommendations are forthcoming. Some additional fiscal tightening – beyond what is currently planned – combined
with a reform that stabilizes pension spending, will likely be necessary to put debt dynamics on a firm downward
trajectory and rebuild fiscal space. The negative adjustment to the “Fiscal Management and Policy” building block
reflects our view of the ongoing fiscal challenges.
Large Investments, Strong Global Demand And Better Health Conditions Support Uruguay’s Growth Outlook

Before the pandemic hit in 2020, the Uruguayan economy was growing at a slow pace. GDP growth averaged just 0.9%
from 2015 to 2019. This followed a decade (2005-2014) of rapid growth when the economy expanded 5.3% per year.
The slowdown was partly due to lower commodity prices and deep recessions in neighboring Brazil and Argentina, but
weak underlying domestic dynamics were also contributing factors. The two most salient features during this period of
weak economic growth were rising unemployment and declining investment.

However, growth prospects look better in the post-pandemic period. The construction of a large new pulp mill in central
Uruguay by Finnish firm UPM, as well as various railway and port facility projects, is underway and should bolster
growth prospects over the medium term. Micro-reforms that promote greater efficiency in the domestic market (i.e.
reforms to state-owned utilities) and that foster greater integration in global markets (i.e. potential trade agreements)
could also have a positive impact on productivity and investment. The IMF expects GDP growth of 2.6% per year from
2022 to 2025.

Volatility in the external environment poses risks to the outlook. The small and open nature of the Uruguayan economy
leaves it exposed to shifts in global commodity prices and the economic cycles of its large neighbors. Macroeconomic
volatility in Argentina or Brazil could negatively affect Uruguay through the trade channel, specifically weaker demand
for goods exports and tourism services. Outside of the region, a sharper-than-expected deceleration in China could affect
Uruguay’s outlook directly through the terms of trade channel, as well as indirectly through weaker demand from
Uruguay’s commodity-exporting neighbors.

Prudent Debt Management And Large Liquidity Buffers Safeguard Against External Shocks

The larger deficit and economic recession led to a significant increase in government debt. Non-financial public sector
debt increased from 60% of GDP in 2019 to 68% of GDP in 2020. The debt ratio is projected to increase slightly over
the next few 3-4 years but then stabilize as fiscal consolidation advances. The currency composition presents some risk,
as more than half of central government debt is denominated in foreign currency, thereby leaving public finances
vulnerable to exchange rate shocks. To incorporate this risk, a negative adjustment is applied to the “Debt and Liquidity”
building block.

However, conservative public debt management supports Uruguay’s credit profile. Rollover and liquidity risks are
minimal. Liquid assets held by the central government combined with contingent credit lines from multilateral
organizations largely cover all debt servicing needs for 2022. Exposure to interest rate risk is also limited due to the long
average maturity of government debt (13 years) and the high share of debt that carry fixed rates (95%).

Sound external accounts and sizable reserves also bolster the economy’s defenses. The current account shifted from a
surplus of 1.6% of GDP in December 2019 (rolling 4 quarters) to a deficit of 2.3% in June 2021. The shift was due to the
sharp decline in tourism service exports, the increase in imports related to construction of the new pulp mill, and an
increase in primary income outflows. However, the deficit is fully funded by net inflows of foreign direct investment,
which totaled 3.0% of GDP in June 2021, and exchange rate flexibility should help the economy adjust to evolving
global conditions. In addition, reserves are high at USD 17.2 billion (31% of GDP). This includes the allocation of
Special Drawing Rights from the IMF in August, which totaled USD 585 million. The high level of reserves provide the
central bank with substantial foreign exchange liquidity in the event of turbulence in global financial markets.

Uruguay’s New Monetary Policy Framework Is Being Tested

The central bank is gradually withdrawing highly accommodative monetary policy as inflation remains above the upper
threshold (7%) of the central bank’s target range. Headline inflation increased to 7.9% year-over-year in October 2021.
This partly reflects rising global commodity prices but the upward price pressures are broad-based. In response, the
central bank has started withdrawing monetary stimulus. Policymakers have hiked rates three times from August to
November, cumulatively increasing the policy rate 125bps to 5.75%. In its November meetings, the central bank also
signaled that additional hikes should be expected. The measured pace of policy tightening reflects the central bank’s
efforts to lower inflation expectations while avoiding sharp policy changes that could disrupt the recovery.

Policymakers have made several changes to the monetary policy framework to better anchor inflation expectations:
reaffirming price stability as the principal objective, changing the main policy instrument from the growth in monetary
aggregates to a short-term policy rate, and lowering the upper limit of the target range to 6 percent starting in September
2022. DBRS Morningstar views these changes positively. However, while inflation expectations over 24 months have
declined over the last year, they remain above central bank’s upper limit. The challenge of anchoring expectations for
the central bank is complicated by the weak transmission of monetary policy amid high financial dollarization and low
financial intermediation.

The banking system has weathered the COVID-19 shock relatively well and financial stability risks appear contained.
The banking system continues to be profitable, highly liquid, and well-capitalized. Non-performing loans remain low at
2.4% of total loans in June 2021. Risks to the banking system stemming from events in Argentina are well-contained,
with non-resident deposits accounting for less than 10% of total bank deposits and only 4% of loans directed to non-
residents. With financial stability risks contained, a positive adjustment was made to the “Monetary Policy and Financial
Stability” building block assessment.

Uruguay’s Strong Institutional Quality And Stable Politics Facilitate The Government’s Policy Agenda

Uruguay’s political environment remains a key credit strength. Uruguay is a stable liberal democracy with an effective
government and low levels of corruption, and the country scores highly across international governance measures. A
centrist electorate facilitates political moderation and pragmatic policymaking. The basic pillars of macroeconomic
policy are broadly supported across the political spectrum. The predictability of the policy framework through the
electoral cycle fosters a favorable environment for economic growth.

The current government is well-placed to carry out their policy agenda. The National Party and its coalition partners hold
a majority in both houses of congress. With the next elections scheduled for late 2024, the government can largely set
the course for policy over the next three years. Nevertheless, the government faces some political risks. In July 2021,
social organizations, worker unions, and opposition parties called for a referendum to repeal 135 articles of the Urgent
Consideration Law, which includes the new fiscal framework. The referendum will most likely take place in the first half
of 2022. If the referendum passes, the government would likely continue to operate fiscal policy within the new
framework even if it is no longer written in law. On the other hand, if the referendum does not pass, the government may
have greater political capital to pursue its other policy priorities, such as the pension reform, prior to the 2024 general
elections.

ESG CONSIDERATIONS

Human Rights and Human Capital (S) were among the key ESG drivers behind this rating action. Uruguay's per capita
GDP is relatively low at USD 16,022 in 2020. This factor has been taken into consideration in the “Economic Structure
and Performance” building block.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can
be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit
Ratings at https://www.dbrsmorningstar.com/research/373262.

For more information on the Rating Committee decision, please see the Scorecard Indicators and Building Block
Assessments: https://www.dbrsmorningstar.com/research/388666.

Notes:
All figures are in U.S. dollars unless otherwise noted. Public finance statistics reported on a general government basis
unless specified. The non-financial public sector includes: the central government (including the Social Security public
fund), local governments, public enterprises, and the state-owned insurance bank. The consolidated public sector
includes the non-financial public sector and the central bank. Metrics in the report calculated with the recently released
(December 2020) rebased GDP statistics from the Banco Central del Uruguay, unless indicated otherwise.

The principal methodology is the Global Methodology for Rating Sovereign Governments
https://www.dbrsmorningstar.com/research/381451/global-methodology-for-rating-sovereign-governments (July 9,
2021). Other applicable methodologies include DBRS Morningstar Criteria: Approach to Environmental, Social, and
Governance Risk Factors in Credit Ratings https://www.dbrsmorningstar.com/research/373262/dbrs-morningstar-
criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings (February 3, 2021).

Generally, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-
month period. DBRS Morningstar’s outlooks and ratings are monitored.

The primary sources of information used for this rating include the Ministerio de Economía y Finanzas, Banco Central
del Uruguay, Instituto Nacional de Estadística, Superintendencia de Servicios Financieros, the IMF, the World Bank,
NRGI, Brookings, Bank for International Settlements, UNDP, Transparency International, and Haver Analytics. DBRS
Morningstar considers the information available to it for the purposes of providing this rating was of satisfactory quality.
The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar did
not have access to the accounts and other relevant internal documents of the rated entity or its related entities in
connection with this rating action.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com.

DBRS, Inc.
140 Broadway, 43rd Floor
New York, NY 10005 USA
Tel. +1 212 806 3277

Issuer Debt Rated Rating Action Rating Trend

Uruguay, Oriental Republic of Long-Term Foreign Currency - Issuer Rating Confirmed BBB (low) Stable
Uruguay, Oriental Republic of Long-Term Foreign Currency - Issuer Rating Trend Change BBB (low) Pos
Uruguay, Oriental Republic of Long-Term Local Currency - Issuer Rating Confirmed BBB (low) Stable
Uruguay, Oriental Republic of Long-Term Local Currency - Issuer Rating Trend Change BBB (low) Pos
Uruguay, Oriental Republic of Short-Term Foreign Currency - Issuer Rating Confirmed R-2 (middle) Stable
Uruguay, Oriental Republic of Short-Term Foreign Currency - Issuer Rating Trend Change R-2 (middle) Pos
Uruguay, Oriental Republic of Short-Term Local Currency - Issuer Rating Confirmed R-2 (middle) Stable
Uruguay, Oriental Republic of Short-Term Local Currency - Issuer Rating Trend Change R-2 (middle) Pos

Contacts
Michael Heydt
Senior Vice President
Global Sovereign Ratings
+1 212 806 3210
[email protected]

Yolanda Ngo
Senior Analyst
Global Sovereign Ratings
+1 212 806 3276
[email protected]

Thomas Torgerson
Managing Director, Co-Head of Sovereign Ratings
Global Sovereign Ratings
+1 212 806 3218
[email protected]
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Uruguay
Scorecard Indicators Source Current Scorecard Input
Fiscal Management and Policy 2015 2016 2017 2018 2019 2020 2021 2022 2023
Overall Fiscal Balance (% of GDP) -1.9% -2.7% -2.5% -1.9% -2.7% -4.7% -4.2% -3.6% -2.6% IMF WEO 13 year average -2.6%
Government Effectiveness (Percentile Rank) 71.6 72.6 69.7 73.1 74.5 75.0 - - - World Bank 5 year average 72.3
Debt and Liquidity 2015 2016 2017 2018 2019 2020 2021 2022 2023
General Government Gross Debt (% of GDP) 58.2% 56.8% 56.5% 58.6% 60.5% 68.1% 67.5% 68.8% 70.0% IMF WEO 5 year projection 70.7%
Interest Costs (% of GDP) 2.1% 2.4% 2.4% 2.4% 2.2% 2.6% 2.3% 2.5% 2.6% IMF WEO 5 year average 2.4%
Economic Structure and Performance 2015 2016 2017 2018 2019 2020 2021 2022 2023
GDP per Capita (USD thousands) 16.7 16.4 18.4 18.5 17.6 16.0 17.0 17.9 18.5 IMF WEO 10 year average 17.1
Output Volatility (%) 3.8% 3.7% 4.1% 4.1% 3.9% 3.8% 3.6% 2.9% 2.9% IMF WEO Latest 3.8%
Economic Size (USD billions) 58 57 64 65 62 57 60 64 66 IMF WEO 5 year average 61
Monetary Policy and Financial Stability 2015 2016 2017 2018 2019 2020 2021 2022 2023
Rate of Inflation (%, EOP) 9.4% 8.1% 6.6% 8.0% 8.8% 9.4% 7.2% 5.8% 5.0% IMF WEO 13 year average 7.8%
1
Total Domestic Savings (% of GDP) - - - 12% 12% 14% 13% - - BCU/IMF Latest 14%
1
Change in Domestic Credit (% of GDP) 3.0% -2.1% -1.6% 0.9% 0.5% 2.0% - - - BIS/IMF 7 year average 0.6%
1
Net Non-Performing Loans (% of Capital) 3.9% 6.9% 5.7% 6.0% 4.4% 3.8% - - - IMF IFS Latest 3.8%
1
Change in Property Price/GDP Index (%) 12.8% 1.9% -3.0% -6.5% 4.2% 20.2% - - - INE/IMF 7 year average 5.1%
Balance of Payments 2015 2016 2017 2018 2019 2020 2021 2022 2023
Current Account Balance (% of GDP) -0.3% 0.7% 0.0% -0.5% 1.3% -0.7% -1.3% -0.3% -0.2% IMF WEO 8 year average -0.1%
1
International Investment Position (% of GDP) -30.0% -27.3% -26.7% -25.7% -27.5% -32.1% - - - IMF 5 year average -27.9%
Share of Global Foreign Exchange Turnover (Ratio) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% - - - BIS/IMF Latest 0.0%
Exchange Rate Classification (see footnote) 3 3 3 3 3 3 - - - IMF Latest 3
Political Environment 2015 2016 2017 2018 2019 2020 2021 2022 2023
Voice and Accountability (Percentile Rank) 85.7 86.7 86.7 88.4 88.9 93.7 - - - World Bank 5 year average 87.3
Rule of Law (Percentile Rank) 75.0 74.5 72.6 73.1 74.5 74.0 - - - World Bank 5 year average 73.9
See DBRS Morningstar’s Global Methodology for Rating Sovereign Governments for additional details on the methodology behind the scorecard indicators and associated scoring thresholds. Exchange Rate Classifications: Freely floating exchange rate = 1; Float = 2; Crawls, banded pegs, and
other managed = 3; Stabilized = 4; Pegs, currency unions and dollarized arrangements = 5.
1
Scores for 2020 have been computed using the most recent data when year-end data is not available.

Rating Committee Date: 22-Nov-2021

Uruguay
Building Block Assessments and Rating Committee Summary 22-Nov-2021
Quantitative Net Impact of Building Block
Building Blocks Scorecard Result
Assessment Qualitative Factors Assessment

Fiscal Management and Policy 14.77 Good - 1 Category Good/Moderate

Debt and Liquidity 11.13 Good/Moderate - 1 Category Moderate

Economic Structure and Performance 5.47 Poor N/A Poor

Monetary Policy and

10.46 Moderate + 1 Category Good/Moderate
Financial Stability

Balance of Payments 12.21 Good/Moderate N/A Good/Moderate

Political Environment 18.13 Strong N/A Strong

Composite Scorecard Composite Building Block

Overall Assessment Scorecard Rating Range Indicative Rating Range
Result Assessment
60.1 A (low) - BBB 58.5 A (low) - BBB

Uruguay's Long-Term Foreign Currency - Issuer Rating BBB (low)

Main topics discussed in the Rating Committee include: the outlook for fiscal consolidation, the growth outlook and external risks, and the political environment. The Rating
Committee Decision reflects additional emphasis on the following factors: Fiscal Management and Policy, and Economic Structure and Performance. For additional details on
DBRS Morningstar analysis and opinions, please see the accompanying rating report.

DBRS Morningstar Scorecard: Scoring Ranges and Associated Assessment Categories

Lower Bound 0.00 1.00 3.00 5.00 7.00 9.00 11.00 13.00 15.00 17.00 19.00

Upper Bound 0.99 2.99 4.99 6.99 8.99 10.99 12.99 14.99 16.99 18.99 20.00

Assessment Weak/ Poor/ Good/ Strong/

Very Weak Weak Poor Moderate Good Strong Very Strong
Category Poor Moderate Moderate Good
 Oriental Republic of Uruguay
ESG Checklist
Extent of the Effect on
the ESG Factor on the
ESG Factor ESG Credit Consideration Applicable to the Credit Analysis: Y/N
Credit Analysis: Relevant
(R) or Significant (S)*

Environmental Overall: Y R
Emissions, Effluents, Do the costs or risks result in changes to a government’s financial standing or relationship with other
N N
and Waste governments, and does this affect the assessment of credit risk?
Carbon and GHG Costs Does a government face coordinated pressure from a higher-tier government or from numerous
foreign governments as a result of its GHG emissions policies, and does this affect the assessment of N N
credit risk?
Will recent regulatory changes have an impact on economic resilience or public finances? N N
Carbon and GHG Costs: N N
Resource and Energy Does the scarcity of key resources impose high costs on the public sector or make the private sector
N N
Management less competitive?
Is the economy reliant on industries that are vulnerable to import or export price shocks? N N
Resource and Energy Management: N N
Land Impact and Is there a risk to a government’s economic or tax base for failing to effectively regulate land impact
N N
Biodiversity and biodiversity activities?
Climate and Weather Risks Will climate change and adverse weather events potentially destroy a material portion of national
Y R
wealth, weaken the financial system, or disrupt the economy?

Social Overall: Y S
Human Capital and Human Compared with regional or global peers, is the domestic labour force more or less competitive,
Y S
Rights flexible, and productive?
Are labour or social conflicts a key source of economic volatility? N N
Are individual and human rights insufficiently respected or failing to meet the population’s
N N
expectations?
Is the government exposed to heavy, coordinated international pressure as a result of its respect for
N N
fundamental human rights?
Human Capital and Human Rights: N N
Access to Basic Services Does a failure to provide adequate basic services deter investment, migration, and income growth
N N
within the economy?

Governance Overall: N N
Bribery, Corruption, and Does widespread evidence of official corruption and other weaknesses in the rule of law deter
N N
Political Risks investment and contribute to fiscal or financial challenges?
Institutional Strength, Compared with other governments, do institutional arrangements provide a higher or lesser degree
Governance, and of accountability, transparency, and effectiveness? N N
Transparency
Are regulatory and oversight bodies insufficiently protected from inappropriate political influence?
N N

Are government officials insufficiently exposed to public scrutiny or held to insufficiently high ethical
N N
standards of conduct?
Institutional Strength, Governance, and Transparency: N N
Peace and Security Is the government likely to initiate or respond to hostilities with neighboring governments? N N
Is the government’s authority over certain regions contested by domestic or foreign militias?
N N
Is the risk of terrorism or violence sufficient to deter investment or to create contingent liabilities for
N N
the government?
Peace and Security: N N

Consolidated ESG Criteria Output: Y S

* A Relevant Effect means that the impact of the applicable ESG risk factor has not changed the rating or rating trend on the issuer.
A Significant Effect means that the impact of the applicable ESG risk factor has changed the rating or trend on the issuer.
Oriental Republic of Uruguay: ESG Considerations

November 24, 2021

Environmental
This factor does not affect the ratings assigned to Uruguay. Under the 2015 Paris Agreement, Uruguay expects to be a net carbon sink
by 2030 through the expansion of tree plantations. Uruguay has also set targets to reduce the emissions intensity of the cattle industry.
More than 90% of the electricity generated within the country comes from renewable sources such as wind, solar, hydropower, and
biomass. Additionally, efforts are underway to transition to electric vehicles and to become a green hydrogen producer. In DBRS
Morningstar’s view, the fiscal, regulatory, and enforcement measures required to achieve the country’s climate goals are unlikely to
impact sovereign credit quality. Uruguay faces climate and weather-related risks in the form of occasional droughts which impact
agriculture output and electricity generation.

Social
The subfactor Human Rights and Human Capital affects the rating. Uruguay's per capita GDP is relatively low at USD 16,022 in 2020,
reflecting a low level of labor productivity. The subfactor Access to Basic Services does not affect the ratings. Uruguay has a robust social
welfare system and the government provides for relatively high-quality healthcare, education, and social assistance. Uruguay ranks 38th
among the 163 countries assessed in the 2020 Social Progress Index.

Governance
This factor does not affect the ratings assigned to Uruguay. Uruguay has independent and transparent governing institutions, which
provide a stable environment for investment relative to regional peers. Uruguay scores above the 70th percentile rank in all the Worldwide
Governance Indicators, but is a particularly strong performer in the Control of Corruption indicator (ranking in the 89th percentile) and in
the Voice and Accountability indicator (ranking in the 93rd percentile).