Trump was between 10% and 15% responsible for the fall in poverty in Uruguay, according to economist

The economist Matias Brum stated that the trade policies of the president of USADonald Trump, had an indirect impact on the fall in child poverty in Uruguaythrough the lowering of dollar and its effect on inflation.

“Trump is 10%, 15% responsible for what could have happened to child poverty in Uruguay, even though it sounds extremely delusional,” he said this Wednesday in an interview with the El País streaming program. In Key.

Brum, doctor in Economics and professor at the Faculty of Economics and Administration (FCEA), referred to the data released by the National Statistics Institute (INE), which showed a reduction in poverty of 2.9 percentage points in the first half of 2026 compared to the same period in 2025 and of 1.8 percentage points compared to the average for the year 2025.

The poverty In Uruguay it reached 11.6% of households and 14.8% in the first half of 2026, compared to 13.9% and 17.7% respectively in the first half of 2025. These households and people do not exceed the minimum income necessary to cover basic food and non-food needs. In 2025 there were then 578,665 poor Uruguayans.

The economist maintained that the reduction in poverty is statistically significant. As he explained, there are about 95,000 fewer people below the poverty line compared to the first half of 2025.

Brum pointed out that in recent years there had been decreases in poverty that, due to their magnitude, were within the measurement error margin. In those cases, the variations did not allow us to affirm with sufficient certainty that the indicator had decreased. On the other hand, he stated that the drop of almost three percentage points registered now “is out of bounds.”

In relation to the causes of the fall in poverty recorded in the first semester, Brum stated that the main factor was the increase in labor incomewhich “explains approximately two-thirds of the drop.” As indicated, income grew especially among people located in the lowest sections of the distribution.

“Everyone got out a little bit,” he said when analyzing who got out of poverty and explained that the improvement was not concentrated exclusively on those who were closest to the poverty line, but rather reached people located at different income levels.

The remaining third of the fall corresponds to other income, among which he mentioned the increase in Parenting Bonus given by the Ministry of Social Development (Mides) and the lowest pensions. However, according to their estimates, these measures could explain “only between 0.2 and 0.4 percentage points” of the poverty reduction.

Regarding salary, he pointed out that the Salary Advice round prioritized increases for lower-income workers, particularly those earning salaries of less than $30,000 or $35,000. In that sense, he attributed the achievement to “a shared responsibility” between the Ministry of Economy and Finance (MEF), the Ministry of Labor and Social Security (MTSS) and the other actors in collective bargaining.

However, he maintained that it also affected that the inflation It was less than expected and he said that “it was not foreseen and surprised.” As he explained, this meant that the salary increases agreed upon in the collective bargaining would have a greater effect on the purchasing power of workers.

In relation to the “disinflationary shock”, the economist also attributed responsibility to the Banco Central of Uruguay (BCU). According to him, when the monetary authority observed that inflation was falling, partly due to the fall of the dollar, it adopted measures to consolidate that reduction. “The BCU strengthened itself, put its foot down and took measures and policies to take advantage of that and consolidate a fall in inflation,” he indicated.

The economist linked part of the dollar’s fall to international factors, including trade policies and tariffs promoted by Trump. This evolution had an impact on inflation and, thus, on the purchasing power of income.

“There is a part of the fall in poverty that was disinflationary shockwhich was that prices rose less than they were expected to rise,” he explained.

Brum pointed out that the responsibility for the poverty reduction It cannot be attributed exclusively to a decision of the Uruguayan government or to a single international factor. In his explanation, the evolution of the dollar, the decisions of the BCU to consolidate the decline in inflation and the negotiated salary increases contributed to improving real incomes.

He also indicated that the fall of the dollar It was recorded in several countries in the region, but it did not have the same effect on inflation in all of them. Likewise, lower prices did not always translate into an increase in real income. For this reason, he distinguished between the international context and the economic and salary policy decisions adopted in Uruguay.

Photo: Darwin Borrelli.

Brum noted that the effect of “disinflationary surprise “will hardly be repeated with the same intensity. He explained that the economic actors already know the new level of inflation and that the next salary increases will be negotiated in a different context.

He recalled that inflation had gone from around 6% to 4% and pointed out that, with inflationary pressures again present and the BCU raising the interest rateexpects that the next increases in income will coexist with an inflation closer to the monetary authority’s objective, of 4.5%.

In addition, he mentioned that some tables of salary negotiation They incorporated adjustment mechanisms that can operate downwards when income increases exceed certain parameters. For this reason, he considered that the effect of salary increases on poverty could be moderated from now on.

Brum warned that being above the poverty line does not necessarily mean that a household has stopped facing economic difficulties or deprivation. As an example, he pointed out that in Montevideo a single person who rents needs income greater than $25,195 to be above that threshold.

“A person who earns $26,000 is above the poverty line, but can still be considered poor in popular terms,” he stated. As explained, measurement by income establishes a limit to determine whether a household’s resources are enough to cover a consumption basket, but it does not take into account all the dimensions of their living conditions.

One of the “surprising” data that Brum highlighted was the reduction in poverty among children and adolescents, which exceeded the general drop in the indicator. While total poverty decreased 2.9 percentage points, among those under six years of age the drop was 7.5 points and among those under 18 years of age, it was 5.5 points.

As he explained, the reduction was greater in households with more members. In particular, he noted that the decline was not only concentrated in single-parent households, but also in families with several children.

The economist linked this result to the evolution of the labor market and the increase in the number of employed people. He indicated that, in some households, more than one member began to contribute income, which improved the resources available to cover family needs.