Uruguay government to reallocate funds to security, education, and social programs

Uruguay's government is set to reallocate significant resources towards key social and security initiatives, aiming to bolster efforts against child poverty, enhance education, improve public safety, and address homelessness.

The plan involves a substantial shift of funds, with approximately US$46 million earmarked for reallocation by 2027, escalating to US$65 million annually by 2029. This financial maneuver is part of a broader strategy to prioritize government spending amidst budgetary constraints.

Savings will be generated through a multi-pronged approach. Measures include reducing operational expenses by digitizing trade documents, cutting down on official travel, and eliminating vacant positions within the central administration. The Ministry of Economy and Finance anticipates savings of around US$40 million from administrative streamlining, with additional funds coming from a reduction in tax exemptions for electric and hybrid vehicles.

Specific allocations from the reallocated funds are targeted towards the security sector, including the creation of 300 new police and prison staff positions, along with investments in surveillance systems and electronic monitoring devices. The government aims to achieve these spending increases without compromising its structural fiscal balance goals, projecting a fiscal deficit of 4.1% of GDP for 2026.