State predation on the private sector is about to reach intolerable levels

The National Budget 2025-2029 was presented with an optimism that, as always, depends on variables that the State does not control: the real growth of the economy. This official document assumes a trajectory of expansion that makes it possible to finance growing public spending without touching too much the pocket of those who actually produce. But what happens if reality — as is often the case — is more stubborn than the Excel tables of the Ministry of Economy

?

The answer is as clear as it is uncomfortable: greater state depredation on the private sector. Today, according to the most honest measures of effective fiscal pressure and resource appropriation (direct and indirect taxes, social security contributions, regulations that function as disguised taxes and public spending financed with future debt), the State already owns approximately 54% of the gross private product. Yes, you read that right: out of every 100 pesos generated by the Uruguayan private sector, the state apparatus appropriates 54. The rest is what's left to invest, pay real wages, innovate and, ultimately, grow

.

Now let's imagine that real GDP growth is below what was projected in the Budget. Revenues fall. Spending — which is already committed to public salaries, indexed retirees, transfers and works — doesn't magically go down. What does the State do then? Exactly what it has always done when the accounts don't close: pressure is increasing on the only sector that generates net wealth

.

This translates into:

- Tax increases (either by raising rates, eliminating exemptions or creating

new “solidarity taxes”).

- Higher debt issuance that will later be paid with more future taxes.

- More suffocating regulations that make private activity more expensive (licenses, controls, labor costs).

- Disguised cuts in public investment that, in practice, end up being transferred as a greater burden to the taxpayer.

The result is a vicious perverse cycle: less growth, less collection, more predation, even less growth. And the private sector, which already bears 54% of the burden, ends up financing the feast of a State that grows faster than the economy that supports it

.

It's not alarmism. It's elementary arithmetic. The 2025-2029 Budget is built on the premise that the private sector will continue to be the dairy cow willing to give more milk every time state milking needs it. But cows, when milked too much, stop producing... or they directly die.

Uruguay today has an historic opportunity: the private sector still generates wealth despite the burden. But if real growth disappoints — and external signals (commodity prices, international rates, regional uncertainty) don't help — the statist temptation will be to raise that 54% even higher. We have seen it before: every time the economy slows down, the first reflection is “that those who produce pay more

”.

The only responsible way out is not to adjust the Budget on paper. It means structurally reducing the size of the State, reducing the burden on the private sector and allowing the 46% that currently remains in the hands of those who risk their capital to be greater. Because if not, 54% will become 58%, then 62%... and someday we'll wake up wondering where Uruguay was, which once knew how to grow without preying

on its own wealth creators.

Growth is not a number in an MEF chart. It's the only real way to reduce state predation. If it falls below what was projected, the price will be paid — as always — by the

private sector.

And this time, with 54% of load already on top, the margin for further tightening is dangerously narrow.