During the second half of President Lacalle Pou’s coalition government, public dissatisfaction grew over the pension reform and a series of corruption and patronage scandals that led to several high-level resignations. In the 2024 elections, the opposition Frente Amplio won the presidency and secured control of the Senate, signaling a significant political shift.
Economic activity rebounded in 2024 after a drought-induced slowdown in 2023, with moderate growth and improvements in wages, employment and inflation. However, the fiscal deficit returned to pre-2020 levels, highlighting persistent fiscal constraints despite gains in key economic indicators.
Governance challenges remained pronounced, as homicide rates reached record levels during Lacalle Pou’s government, due to conflicts among drug-trafficking groups. Attempts to advance new trade agreements with the European Union achieved limited results, as Mercosur partners blocked major initiatives. The incoming government pledged to redesign social policies and support small and medium-sized enterprises.
