#1Cardenal Copete Rojo (Paroaria Coronata) Photo credit: Leonardo Colistro República Oriental del Uruguay Institutional Investor Presentation September 2021 Ministerio de Economía y Finanzas#2Disclaimer This material has been prepared by the Oriental Republic of Uruguay (the "Republic") for information purposes only and is not intended to contain any information that may be necessary to assess the Republic or its financial status. The accuracy and completeness of the information and opinions contained in this material are not expressly or implicitly represented or guaranteed by or on behalf of the Republic. This material is not, or does not constitute, an offer to purchase or solicitation to purchase any security, nor does this material, in whole or in any part, form or be relied upon in the determination or commitment of any contract or investment. This material includes forward-looking statements. The words "believe," "may," "will," "aim," "estimate,” “continue," "anticipate," "intend," "assume," "budgeted," "target," "expect," "forecast" and similar words are intended to identify forward-looking statements. These statements are based on Republic's current plans, estimates, assumptions and project ions. Therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made. Many important factors could cause the Republic's actual economic results to differ substantially from those anticipated in forward-looking statements presented herein. These factors include, but are not limited to: (i) adverse external factors, such as changes in international prices, high international interest rates and recession or low economic growth in Republic's trading partners, (ii) changes in international prices and high international interest rates could increase Republic's current account deficit and budgetary expenditures, (iii) recession or low economic growth in Republic's trading partners could decrease exports (including manufactured goods) from Republic, reduce tourism to Republic, induce a contraction of the Republican economy and, indirectly, reduce ta x revenues and other public sector revenues and adversely affect the country's fiscal accounts; (iv) adverse domestic factors, such as a decline in foreign direct and portfolio investment, increases in domestic inflation, high domestic interest rates and exchange rate volatility and a further deterioration in the health of the domestic banking system, which could lead to lower economic growth or a decrease in Republic's international reserves and (v) other adverse factors, such as climatic or political events, international hostilities and the effects of pandemics or epidemics and any subsequent mandatory regulatory restrictions or containment measures. This material also contains estimates made by independent parties relating to macroeconomic metrics and other data. These estimates involve a number of assumptions and limitations and you are cautioned not to give undue weight on such estimates. Such information is presented for illustrative purposes only and we do not purport to assert that such information is comparable across countries or regions or indicative of future performance. We have not independently verified the accuracy or completeness of such information and we do not take any responsibility with the accuracy or completeness of such information. Republic, its advisors and agents and their respective officers, affiliates, agents, directors, partners and employees shall not have any obligation, for any reason, to update or to revise any forward-looking statements because of new information, future events or other factors. In light of the risks and uncertainties described above, the future events and circumstances discussed in this material might not occur and are not guarantees of future performance. Because of these uncertainties, you should not make any investment decision based upon these estimates and forward-looking statements. This document is not an offer, solicitation or sale of securities in the United States or any other state or jurisdiction, and there shall not be any offer, solicitation or sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law s of any such state or jurisdiction. 2#3República Oriental del Uruguay Uruguay at a Glance#4Uruguay at a Glance Population Total Surface Territorial Waters Oriental Republic of Uruguay Administrative Structure Human Development Index Nominal GDP (USD, 2020) GDP per Capita (nominal USD, 2020) GDP Real Growth Rate (1Q21, YoY) CPI YOY (July 2021) Unemployment Rate (June 2021) Life Expectancy at Birth Infant Mortality Adult Literacy Rate 3.5 million 176,215 km² 142,000 km² 19 Departments O.817 ("very high") $53.57bn $15,172 (highest in Latin America) -2.8% 7.30% 9.4% 73.4 years 6.8 deaths / 1,000 live births 98.6% (highest in Latin America) | The Oriental Republic of Uruguay ("Uruguay") is a South American, Spanish-speaking country that is one of the oldest democracies in Latin America. Both Uruguay and Japan are considered full democracies. Uruguay has a free market economy characterized by an export-oriented agricultural sector, a well- educated workforce, and high levels of social spending. 4 Source: Central Bank of Uruguay, National Institute of Statistics of Uruguay, United Nations Development Programme, IMF - World Economic Outlook Database (WEO), April 2021#5Uruguay has the highest GDP per capita in the region together with the most fair income distribution in LATAM Real GDP Growth in Uruguay (1) (Annual change, in %) GDP per capita and income distribution compared to Latam (2) (Gini Index, latest available; GDP per capita in nominal US$ in 2020) Uruguay 7 5 3 -1 1 II.. -3 -5 16,000 Panama 12,000 3.5 -7 2005 2007 2009 2011 2013 2015 2017 2019 2021* 8,000 Brazil Colombia 4,000 Chile Costa Rica Mexico Peru Ecuador Paraguay Bolivia 0.53 0.48 Better income distribution 0.43 0.38 Gini Index (*) Ministry of Economy and Finance's projection (1) Source: Central Bank of Uruguay. From 2016 to 2020, it uses National Accounts data with base year 2016. From 2005 to 2015, it uses retropolated data based on statistical splicing techniques, consistent with the National Accounts based on 2016 prices. Disclaimer: The series obtained for the period 2005-2015, unlike that for the period 2016 onwards, cannot be considered a compilation of National Accounts, since it relies heavily on the use of statistical techniques. (2) Sources: ECLAC and IMF - WEO April 2021 5#6Over the last decade, Uruguay's growth has decoupled from the regional downturn, by diversifying into other export markets Cumulative Real GDP Growth between 2011 and 2020 (1) Exports of Goods by destination (2) (In %) 15 2001 11.9 Argentina 15% 10 5 -5 -10 -12.1 -15 Argentina -1.3 Brazil Uruguay 119 countries Others 49% Brazil 22% Japan 1% United China 5% States 8% 2020 Argentina 5% 158 countries Brazil 15% Japan 0.4% Others 46% United States 7% China 27% (1) Sources: Uruguay: Central Bank of Uruguay. From 2016 to 2020, it uses National Accounts data with base year 2016. From 2011 to 2015, it uses retropolated data based on statistical splicing techniques, consistent with the National Accounts based on 2016. Disclaimer: The series obtained for the period 2011-2015, unlike that for the period 2016 onwards, cannot be considered a compilation of National Accounts, since it relies heavily on the use of statistical techniques. Argentina: National Institute of Statistics and Censuses of Argentina. Brazil: Central Bank of Brazil. (2) Source: Uruguay XXI.. Includes Free Trade Zones exports. 6#7Uruguay is a bastion of institutional and political stability in LatAm The country ranks alongside the most developed nations in terms of democratic strength, social mobility, the rule of law, civil liberties, and low perception of corruption. Political Stability and Democracy (1) (Percentile rank) 100 "Full Democracies" 80 60 40 20 Civil Unrest (3) (Index out of 10) 10 8 6 4 2 Adherence to the Rule of Law (2) (Numerical score out of 1) 0000 0.8 回 0.6 0.4 0.2 Corruption Perception (4) (Rank) 180 120 60 (1) Source: Worldwide Governance Indicators, World Bank (2019) and The Economist Intelligence Unit (2020). (2) Source: World Justice Project (2020). (3) Source: Verisk Maplecroft (first quarter of 2020). (4) Source: Transparency International (2020). 7#8Uruguay's credit rating has improved steadily, and in 2021 achieved the lowest sovereign risk spread in LatAm Evolution of Uruguay's sovereign credit ratings (1) Sovereign Risk Premia (2) (EMBI spread in bps, as of August 30th, 2021) A3/A- -Moody's S&P Fitch R&I Baa1/BBB+ Baa2/BBB Investment Grade Baa3/BBB- Ba1/BB+ Ba2/BB Ba3/BB- B1/B+ 2006 2009 2012 2015 2018 2021 (1) Source: Moody's, S&P, R&I, and Fitch. (2) Source: Bloomberg 400 300 200 100 DALIES ∞#9This month marks the 100th anniversary of the establishment of diplomatic relations between Uruguay and Japan Diplomatic relations were established by the two nations in September 1921. Japan and Uruguay have forged an enduring partnership over the last 100 years, promoting free trade and cross- border investment flows. In 2017 Japan and Uruguay signed an Agreement for the Liberalization, Promotion and Protection of Investments. • In December, 2018 Prime Minister Shinzō Abe became the first Japanese Prime Minister to visit Uruguay. He met with former late President Tabaré Vázquez, and the two leaders reaffirmed the countries` shared values, such as freedom and democracy. Japan and Uruguay agreed to open up their respective beef export markets. • On January 6, 2021, the Minister of Foreign Affairs of Japan, Toshimitsu Motegi, visited Uruguay to mark the 100th year anniversary of diplomatic relations between the two nations. • Most recently, Japan and Uruguay signed an agreement to eliminate the double taxation of income between the two countries and improve measures for preventing international tax evasion and tax avoidance. Ministerio de Relaciones Exteriores Ministerio Relaciones bedores Ministerio de Relaciones Exteriores Exteriores de Relaciones Exteriores Ministerio hiterio de Relodones elaciones Exteriores Ministerio de Relaciones Exteriores Ministerio de Relaciones Exteriores Ministerio de Relaciones Exteriores Ministerio Exterior de Relaciones Ministerio Exteriores de Relaciones Ministerio Ministerio de Relaciones Exteriores Ministerio de Relaciones Exteriors elaciones fores Ministerio de Relaciones Exteriores Ministerio de Relaciones Exteriores Ministerio Delaciones Ministerio de Relaciones Exteriores Ministerio sterio Releclenes Relaciones de Relaciones seriores xteriores Ministr de Re Exteri Minist de Rel Minister of Foreign Affairs of Uruguay, Francisco Bustillo, and the Japanese Ambassador to Uruguay, Tatsuhiro Shindo shake hands after signing the agreement for the Elimination of Double Taxation and the Prevention of Tax Evasion and Avoidance between Uruguay and Japan (June 23, 2021). ぶらじろ丸御乗船記念 32年9月2日 横浜出 大阪商船 The first migrants from Japan arrived in Uruguay in 1910 and settled primarily in Montevideo. In the picture above: Japanese migrants departing from the Yokohama port on September 2, 1957, to South America. Photo credit; Emi Abe. Tatsuhi Shindo Embajador de Japon Source: Ministry of Foreign Affairs of Japan, Ministry of Foreign Affairs of Uruguay Franc Ministro de The Japanese Garden in Montevideo, Uruguay. It was donated by Japan as a gift for the 80th anniversary of Japan-Uruguay relations. 9#101 8 Key Credit Highlights Effective response to the COVID-19 Pandemic in 2020; after Surging in First Half of 2021, Virus Spread is Contained through Swift Vaccination Plan 2 7 3 6 Gradual Economic Recovery, driven by Foreign Direct Investment, Stronger Industrial Production and Higher Commodity Exports. 4 5 Fiscal Targets Met in 2020 under New Fiscal Rule; Continued Targeted Support for Vulnerable Companies and Households while Aiming for Improved Structural Fiscal Balance in 2021. Monetary Policy Focused on Reducing Inflation and Anchoring Inflation Expectations within Target, under an Enhanced Monetary Policy Framework. Resilient Current Account Dynamics and Large International Reserve Buffers. Government Forges Ahead with Structural and Pro-Market Reforms, including Social Security, Energy Markets and International Trade Integration. Sovereign Financing Strategies Focused on De-Risking Debt Portfolio in a Cost-Efficient Way, with a Focus on Diversifying Investor Base Uruguay Remains One of the Top Global Performers on ESG Fundamentals; Government is Committed to Climate Action Policies. 10#111 Effective response to the COVID-19 pandemic in 2020, without imposing mandatory lockdown... Uruguay implemented a steadfast COVID-19 containment strategy that allowed the country to limit the virus spread and mitigate fatalities in 2020. Total confirmed cases in 2020 (1) (Per million people, as of December 31st, 2020) 70,000 Management of Covid-19 Pandemic in Latam in 2020 (2) (Index, 100 best performance) 90 = 60,000 50,000 40,000 30,000 20,000 10,000 60 30 76 Uruguay ranked 12th Worldwide in 2020 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Note: Regional and country specific information is as aggregated or reported, as applicable. Each such country information may be calculated differently and aggregated by each respective source using various methodologies. Accordingly, this comparison is for illustrative purposes only and we do not purport to assert that the above information is actually comparable. Source: Our World in Data. (1) (2) Source: Lowy Institute, Australia. Based on data available through end-2020. The average of the rankings across six indicators (confirmed cases, confirmed deaths, confirmed cases per million people, confirmed deaths per million people, confirmed cases as a proportion of tests and tests per thousand people) was normalized for each of the 98 countries to produce a score between 11 O (worst performing) and 100 (best performing) on any given day in the 36 weeks that followed their hundredth confirmed case of COVID-19. No data available for Argentina and Peru#121 ...allowed for a comparatively smaller deterioration of macroeconomic fundamentals in 2020. Uruguay's effective response to the COVID-19 outbreak coupled with political stability and a broad social safety net, allowed it to maintain solid macroeconomic fundamentals. -2 -6 -10 -14 -18 Real GDP Contraction in LatAm in 2020 (1) (In %) -5.9 Deterioration in Fiscal Balances in LatAm in 2020 (2) (Change between 2019 and 2020 in fiscal deficit in % of GDP) 1.8 2 Note: Regional and country specific information is as aggregated or reported, as applicable. Each such country information may be calculated differently and aggregated by each respective source using various methodologies. Accordingly, this comparison is for illustrative purposes only and we do not purport assert that the above information is actually comparable. Source: Official National Statistics. (1) (2) Source: Fitch Sovereign Data Comparator, as of June2021, except for Uruguay that corresponds to official fiscal outturns as reported by the Ministry of Economy and Finance. In all cases, corresponds to the General Government. 12#131 After surging in April-June 2021, virus spread has decreased significantly through swift vaccination campaign Vaccination program has been fast and encompassing: more than 75% of the total population already received at least one dose Evolution of Covid-19 cases and vaccinations (As of August 31st, 2021) 4,000 People vaccinated, by number of dose (Share of total population, as of August 31st, 2021) Share of people fully vaccinated Share of people partly vaccinated New cases* % of people with at least one dose (cumulative, RHS) 3,000 60 1% of people fully vaccinated (cumulative, RHS) 2,000 1,000 40 20 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Aug-21 (*) 7-day rolling average of new cases 1-8 20 40 60 80 Vaccine Program Update as of August 31st, 2021 • Total purchase of 6.95 million vaccine doses (Sinovac, Pfizer and AstraZeneca), plus a donation of 500,000 Pfizer from the United States. • Starting in August, 2021, Uruguay began applying a third booster dose of the Pfizer vaccine for all those who received previously two doses of Sinovac (approximately 1,500,000 people). Source: Our World in Data. In the case of Uruguay, it uses total population as estimated by the National Statistics Institute. Latest data available for each country. 13#14The economy is gaining momentum Garza (Garza Mora Ardea) Photo credit: Leonardo Colistro.#152 Leading economic indicators suggest that a recovery is underway amid higher social mobility, with a positive impact on fiscal revenues Industrial production is recovering strongly, and tax revenues remain resilient Gasoline Demand (1) (Rolling 7-day average, YoY change, in %) 164 Manufacturing Production (2) (YoY real change, in %) Peak 30 50 10 20 10 19.8 -10 -30 -20 -70 -30 Jan-20 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 May-21 Aug-21 Jan-19 Jun-19 Nov-19 Apr-20 Sep-20 Feb-21 Jun-21 Investment in Machinery and Equipment (3) (Index, in physical volume, base 100 = Jun-17) 130 Tax Revenue Collection (4) (YoY real change, in %) 134 20 110 90 70 Jun-17 Jun-18 10 9.6 -10 -20 Jun-19 Jun-20 Jun-21 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jun-21 15 (1) Source: Ministry of Economy and Finance. (2) Source: National Statistics Institute (3) Source: Chamber of Industries of Uruguay. (4) Source: Tax General Directorate (Ministry of Economy and Finance)#162 Higher commodity prices and goods exports are lifting the agricultural sector Tailwinds from higher commodities prices and increased extra-regional competitiveness, although increasing oil prices have tempered improvement in terms of trade Commodities Exports Price Index(1) (Index base 100 = January 2020) Real Effective Exchange Rate of Uruguay vis-à-vis Other Regions or Countries (2) (Index base 100 = January 2017) 130 125 120 115 110 105 100 95 140 126.4 120 100 Real Depreciation 80 Real Apreciation Rest of the World Overall لسد Argentina Warazi Brazil 90 60 Jan-17 Oct-17 Jul-18 Apr-19 Jan-20 Oct-20 Jul-21 Jan-17 Sep-17 May-18 Jan-19 Sep-19 May-20 Jan-21 Jun-21 16 (1) Source: CPA Ferrere based on Bloomberg and National Institute of Meat of Uruguay (INAC). Includes soybeans, meat, rice, dairy products, and pulp weighted by incidence in exports. (2) Source: Central Bank of Uruguay#17Ramp up in foreign direct investment and new tax incentives for fixed capital formation underpin the construction sector Strong increase in fixed capital investment of 18% in real terms is expected in 2021 UPM's Pulp Mill ☐ UPM will invest a total of US$ 3 billion (5.5% of GDP) to build a 2.1 million-tonne greenfield eucalyptus pulp mill in central Uruguay. Proceeding according to schedule. More than 3,000 people are currently working at the construction site. New tax breaks for big-ticket construction projects and social housing ✓ Recent changes to the General Investment Promotion Regime (COMAP) providing more tax incentives encouraging employment creation (housing, offices and urbanization construction) and clean technologies. ✓ Foreign investors are granted the same incentives as local investors: there is no tax discrimination or restrictions for transferring profits abroad. Investment projects presented under COMAP regime (Cumulative) Central Railway Project ▪US$ 1 billion investment in a Central Railway that will run from the city of Paso de los Toros to the port of Montevideo (273 km long). ■Public-Private-Partnership (PPP) modality. Source: Ministry of Economy and Finance of Uruguay. 3,000 2,500 2,500 Total intended investment (in US$ million) 2,000 2,000 Number of projects (RHS) 1,500 1,500 1,000 1,000 500 500 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 17#182 Uruguay has become an attractive destination for foreign direct investment Progress on UPM investment is already showing up on FDI inflows Key Components of Net Capital Inflows (1) (Rolling 4-quarters, in % of GDP) FDI Inflows in LatAm in 2020 (2) (In % of GDP) 5.0 8 Portfolio Other Investments FDI 5 4 -4 4 3 2 1 -1 -8 -2 2016Q4 2018Q1 2019Q2 2020Q3 2021Q1 (1) Source: Central Bank of Uruguay. "Others" includes Other Investments and Financial Derivatives from the Financial Account of the Balance of Payments. Changes in Central Bank reserve assets are not included. (2) Source: World Investment Report 2021, United Nations and WEO April 2021 (in the case of Uruguay it uses GDP data as published by the Central Bank). 18#192 Recovery in consumer confidence has been uneven, reflecting a lackluster labor market Consumer confidence has still to recover on a firmer footing, while labor market indicators and unemployment insurance are improving in the margin Consumer Confidence Index (1) 55 Unemployment Insurance and Employment Rate (2) Employment rate, in % of working age population 58 Number of beneficiaries of Unemployment Insurance, in thousands 200 Moderate 180 optimism 160 56 56 50 149.7 140 120 54 100 55 45 Moderate pessimism 40 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 80 60 40 20 52 50 48 Jan-20 Jun-20 Nov-20 Apr-21 Jun-21 19 (1) Source: SURA Chair of Economic Confidence - Catholic University of Uruguay and Equipos Consultores Consulting firm. (2) Source: Social Security Bank of Uruguay, Ministry of Labor and Social Security and National Institute of Statistics.#20Pillars of the new fiscal rule are aligned Cisnes en lago. Photo credit: Leonardo Colistro.#213 Fiscal targets met in 2020 on the back of disciplined policies and new fiscal framework.... The government honored its pledge to rationalize fiscal accounts by restraining discretionary expenditure, while allocating resources to contain Covid-19 impact on households and firms Central Government Fiscal Balance (1) (In % of GDP)) -1 -3 2016 2017 2018 2019 2020 -5 Primary Balance Interest payments Overall Balance -7 (1) Does not Include extraordinary inflows to the Social Security Trust Fund. Source: Central Bank of Uruguay; Ministry of Economy and Finance of Uruguay -4.0 -5.8 The Government met the 2020 target set in the Budget Law, even accounting for the re- basing of GDP (using previous national accounts estimates, which implies a lower nominal GDP, the fiscal balance observed would have been -6.3% of GDP, and the fiscal target was set at -6.6%). 21#223 ...and all three pillars of the new fiscal rule were met last year, despite rigid government spending structure. Austerity measures based on more efficient discretionary spending and spending oversight allowed to meet all three pillars of the newly-adopted fiscal rule Structural balance target, to account for business cycle fluctuations and one- off/temporary spending and revenue items Headline (1) and Structural Balance (2) (In % of GDP) Cap on real growth in primary expenditure in line with potential real economic growth Primary Spending (Annual real variation, in %) Binding maximum level of annual net indebtedness in absolute dollar amount Net Indebtedness in 2020 (US$ mm) -1 N 3 3 2 -4 -4.3 1 Headline -5 Structural -6 (1) Gross Borrowing 5,891 (Bonds Loans) (2) Amortizations Fiscal rule cap (Bonds + Loans) 2,205 (3) Accumulated Financial Assets 574 0.6 Net Indebtedness - (1) (2) (3) 3,113 Legal limit on net indebtedness was set at US$ 3,500 million 2016 2017 2018 2019 2020 The target for the structural fiscal balance in 2020 was set at -4.4% (1) Does not Include extraordinary inflows to the Social Security Trust. Fund. 2016 2017 2018 2019 2020 The cap for real expenditure growth in 2020 was set at 2.3% (2) The Structural Balance is the fiscal balance that accounts for business cycle fluctuations and one-off/temporary spending and revenue items. Source: Ministry of Economy and Finance of Uruguay. 22#233 For 2021, the government is targeting an improvement in the fiscal balance... Even accounting for additional fiscal measures to cope with COVID-19, the government aims to shore up underlying public finances in 2021 to contribute to stabilize debt burden Central Government Fiscal Balance (1) (In % of GDP) 2016 2017 2018 2019 2020 Jun-2021* -1 -3 -4.0 -5 Interest payments Primary Balance Overall Balance -7 (*) Last 12 months. (1) Does not Include extraordinary inflows to the Social Security Trust Fund. Source: Central Bank of Uruguay; Ministry of Economy and Finance of Uruguay -5.8 -4.9 Central Government deficit for 2021 is currently projected at 4.9% of GDP, given an assumed real growth of 3.5%. GDP 23#243 and continue the consolidation of structural public finances, given the augmented net indebtedness limit. The structural deficit of Central Government is projected to decline around 1 p.p of GDP in 2021 Headline (1) and Structural Balance (2) Primary Spending (In % of GDP) (Annual real variation, in %) -1 -2 -3 -4 -5 -6 1.2 Fiscal rule cap: 2.3% P7 -3.2 -1 -2 Headline -4.9 -3 Structural -4 Net Indebtedness in 2021 (US$ mm, projected) งอ (1) Gross Borrowing 4,917 (Bonds + Loans) (2) Amortizations (Bonds + Loans) 2,003 (3) Accumulated Financial Assets 152 Net Indebtedness - (1) - (2) - (3) 2,762 2020 2021 2022 2023 2024 2025 The target for the structural fiscal balance in 2021 was set at -3.2% 2020 2021 2022 2023 2024 2025 The cap for real expenditure growth was set at 2.3% for each year Augmented legal limit on net indebtedness: US$ 2,990 million (1) Does not Include extraordinary inflows to the Social Security Trust. Fund. (2) The Structural Balance is the fiscal balance that accounts for business cycle fluctuations and one-off/temporary spending and revenue items. Source: Ministry of Economy and Finance of Uruguay. 24#25Building a new monetary policy framework Hornero (Vanellus chilensis), in the door of his nest. Photo credit: Emi Abe#264 Monetary policies focused on bringing down inflation and anchoring inflation expectations within target Enhancements to monetary policy framework, communication strategy and de- dollarization policies 1 Commitment to Lower Inflation 2 Short-term Interest Rate as new Policy Instrument Enhanced 3 Transparency in 4 5 Communication Counter-cyclical Monetary Policy Stance Financial De- Dollarization Source: Central Bank of Uruguay. ■ Key focus is to lower inflation and anchor inflation expectations within the target band in a sustainable way, under a floating exchange rate regime. ■ New monetary policy framework under inflation targeting regime. Designed to improve market signals and allows for fine-tuning of monetary policy at higher frequency. Higher frequency in Monetary Policy Committee (MPC) meetings, published minutes of MPC, relaunched inflation survey, among others. ■ Publication of Central Bank's inflation projections and survey of firms' inflation expectations. ■ To respond to the Covid-19 health emergency, monetary policy has been in an expansionary mode. ■ As the pandemic has eased, the Central Bank announced on August 11th a gradual shift towards a more contractionary monetary policy stance as it had signaled it. would do (increased the reference rate by 50 bps, to 5%). ■ The search for the Peso as a quality currency: rebuilding markets in local currency to mitigate financial dollarization and developing FX derivatives markets. 26#274 4 nflation has been trending significantly down, although remains slightly above inflation target Inflation hovering around the upper ceiling of target band in recent months: negative output gap has eased non-tradable inflation, while fuel prices exert temporary upward pressures Headline Inflation (1) (YOY, in %) Tradable and non-tradable inflation components (2) (YOY, in %) 12 10 16 12 8 Inflation expectation (yer-end) 7.3 97.2 8 σ 2 T Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Dec-21 4 Tradable Inflation Non-tradable Inflation Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 (1) Source: National Institute of Statistics and Central Bank of Uruguay. Median inflation expectations based on Central Bank's market survey as of August 2021.. (2) Source: Central Bank of Uruguay 27 7.7 6.6#284 Significant decline in FX volatility over the past few months, with a low correlation to external risk drivers The Central Bank has intervened as needed on both sides of the forex market to smooth out undue volatility Nominal Exchange Rate in Uruguay (pesos per dollar, as of August 31st, 2021) (1) Nominal Exchange Volatility in Latam (1) (Quarterly average of absolute value of daily percent changes) 48 44 40 36 36 32 1.6 42,4 1.2 0.8 0.4 Uruguay 28 0.0 Mar-18 Nov-18 Jul-19 Mar-20 Nov-20 Aug-21 1Q19 3Q19 1Q20 3Q20 1Q21 2Q21 (1) Source: Central Bank of Uruguay (2) Source: ECLAC, based on Bloomberg 28#295 Moderate current account deficit and large international reserves Mild deterioration in CAB, on the back of lower service exports and higher foreign dividend payments; sizable international reserves provide large external buffer Current Account Balance of Uruguay (1) (Rolling 4-quarters, in % of GDP) 2.0 International Reserves in Latam (2) (In % of GDP, as of end-March 2021) 40 1.5 1.0 0.5 -0.5 -1.0 -1.5 וון 29.6 30 20 T -1.5 -2.0 2016Q4 2018Q1 2019Q2 2020Q3 2021Q1 10 (1) Source: Central Bank of Uruguay. (2) Source: Official National Statistics and International Monetary Fund. Note: Regional and country specific information is as aggregated or reported, as applicable. 29 20#306 Government forges ahead with structural and market- friendly reforms Addressing pre-pandemic structural shortcomings will be key to supporting medium term recovery and potential growth Covid-19 Solidarity Fund Approved on April 8th 2020 ■ Voted unanimously by all parties, to be managed by the Executive branch. ■Fund earmarks the budgetary resources to address the emergency, keeping tabs of the Covid- related expenditures and where and how the money is spent. Source: Ministry of Economy and Finance of Uruguay. Urgent Consideration Law Approved on July 9th, 2020 Changes in the tax code for small businesses. ■ Draft of new fiscal framework. ■Changes in the regulatory framework for energy markets ■Commission of experts of the Pension Reform submitted the diagnosis on March 23rd 2021 and has 90 days onwards to present a comprehensive reform to Congress. 2020-2024 Budget Law Approved on December 18th, 2020. Implementation of new fiscal institutionality. New governance for public enterprises: performance targets and accountability. Environmental and ESG-focused policies (Helsinski Principles). 2020 Budget Review Submitted to Congress on June 30th, 2021 ■ Achievement of 2020 fiscal targets. ■ Update of fiscal projections for the 2021-2025 period. Focus on the efficiency of primary expenditures and the implementation of social programs addressing child poverty and housing for lower- income families 30#317 Proactive sovereign debt management strategies to de-risk debt portfolio and diversify investor base Improvements in currency and maturity structure of debt in line with debt management goals set in the budget Gross and Net Debt Stock of the Central Government (As of end-period, in % of GDP) 80 Currency and Maturity Composition of Debt (As of end-period) 60 40 20 Gross Debt Net Debt 62.6 40 20 Debt in Local Currency (% of total) -Average Time to Maturity (in years, RHS) 15 13.7 13 47.5 11 9 7 2016 2017 2018 2019 2020 2021Q2 2005 2009 2013 2017 2021Q2 (*) (*) Preliminar Source: Debt Management Unit, Ministry of Economy and Finance of Uruguay 31#327 1 Cornerstones of debt management strategy and investor relations approach . Seek a balanced currency composition of debt in terms of local and foreign currency. Diversify sources of funding across markets and continue building a large and diverse investor base. The bedrock of this diversification strategy will continue to be a transparent, predictable and proactive approach towards investor relations and data dissemination. Provide timely and detailed information on financing plans, debt instruments and statistics, economic indicators, ESG fundamentals, rating agencies' reports and the legal framework governing public indebtedness. 132#337 Funding Needs and Financing Sources for 2021 Cornerstones of debt management strategy: deepening local currency markets in a cost-efficient way and proactive liability management operations Flow of Funds in 2021 (US$ mm, projections) FINANCING NEEDS 4,931 Primary Deficit (1) 1,264 Interests Payments (2) 1,513 Amortizations of Bonds and Loans (3) 2,003 Change in Financial Assets (4) 152 FUNDING SOURCES 4,931 Disbursements from Multilaterals and Fin. Instit. 600 Almost 70% of targeted Total Issuance of Market Debt (5) 4,317 Others (net) (6) 14 issuance has been completed as of August. Memo Item: Government Net Indebtedness (GNI) 2,762 Source: Ministry of Economy and Finance of Uruguay. The sum of the components may differ from the totals due to rounding). (1) Excludes extraordinary transfers to the public Social Security Trust Fund (SSTF). (2) Includes interests payments to the SSTF on its holdings of Central Government debt. (3) For 2021, includes the obligations coming due on a contractual basis and bonds repurchased and early redeemed through July 30, 2021. (4) Change in liquid assets of the Treasury and other financial assets (assets of the SiGa trusts and assets with other public sector entities, product of loans contracted by the Republic in representation of the same); a negative value (-) implies a de-accumulation of assets. (5) Includes bonds issued domestically and in international markets. (6) Includes exchange rate and market price valuation effects. 33#347 Large liquidity buffers and precautionary credit lines of the Central Government provide financial backstops Conservative pre-financing policy affords financial flexibility Liquidity Buffers of the Government and Short-Term Debt Service Obligations (1) (In US$ million, as of end-July 2021) 4,000 Foreign Currency ■Local Currency 3,000 with 2,000 Credit Lines Multilaterals 1,000 Liquid Assets Liquidity buffer Debt service obligations over the next 12 months (1) Debt service includes amortization plus interest payments. Source: Debt Management Unit, Ministry of Economy and Finance of Uruguay Available precautionary credit lines with multilaterals totalize USD 1.8 billion: • Corporación Andina de Fomento (US$ 750 million); World Bank (US$ 280 million) • Fondo Latinoamericano de Reservas (US$ 665 million) Inter-American Development Bank (US$ 100 million) 34#35Uruguayan society takes ESG factors very seriously Lechucita de campo (Athene cunicularia). Photo credit: Leonardo Colistro#36Slovakia Uruguay Croatia Barbados Poland Hungary Costa Rica Romania Suriname Chile Argentina Panama Oman 20 Ghana elarus UAE Paraguay Trinidad And... Armenia Malaysia Belize South Africa Morocco Mexico Brazil enegal Serbia Kazakhstan Indonesia Bolivia Ecuador Colombia Ukraine Saudi Arabia El Salvador Qatar 40 Russia Kuwait Jordan Vietnam Azerbaijan Gabon Guatemala China Egypt Cote Dive Tajikistan Bahrain Papua New.... Lebanon Pakistan Uzbekistan Honduras 60 100 Uruguay (#2) 80 -250 -150 65 countries Source: J.P. Morgan Chase & Co. using data from RepRisk, Sustainalytics and Climate Bonds Initiative. The Index may not be copied, used, or distributed without J.P. Morgan's prior written approval. Copyright 2021, J.P. Morgan Chase & Co. All rights reserved." Disclaimer: "Information has been obtained from sources believed to be reliable but J.P. Morgan does not warrant its completeness or accuracy. The Index is used with permission. -350 Uruguay Oman UAE Panama Ghana Chile Poland Argentina Romania Saudi Arabia Qatar Hungary Colombia Philippines Paraguay Dominican Republic Jamaica Costa Rica Croatia Jkraine Brazil Ecuador Russia Slovakia Sri Lanka El Salvador Trinidad And Tobago Morocco Mongolia Belarus Georgia Senegal Peru Bolivia Barbados Armenia Suriname Serbia Namibia Belize 8 Emerging Markets' ESG Score (Index, 100 = best performance; as of end-July, 2021) -50 Tajikistan Papua New Guined Vietnam Zambia Honduras Uzbekistan Gabon ebanon Cote D'Ivoire 36 South Africa Jordan Kuwait Guatemala Kenya Bahrain Egypt Azerbaijan Indonesia Turkey Pakistan Mexico Malaysia China 50 Uruguay is one of the top global performers on ESG fundamentals Weight change when moving from Conventional EMBI to ESG-Adjusted EMBI (In basis points; as of end-July, 2021) 250 150 Uruguay#378 Uruguay's electricity matrix is mostly based on renewable resources, partly as a result of a steady growth in wind energy in the last decade... Rapid decarbonization of electricity system and plan for robust mitigation measures across all emission-intensive sectors Electricity Generation by Source (1) (% of total, 2020) 3% 6% Electricity Generation from Wind Energy (1) (% of total) 50 20% 30% Wind 40 ■Hydro 41% Biomass 30 Solar Fossil Fuel 20 Uruguay ranks #2 in the world in share of electricity production from wind and solar sources in 2020 (2) (1) Source: National Energetic Preliminar Balance 2020, Ministry of Industry, Energy and Mining. (2) Source: Ember's Global Electricty Review 2021 10 2011 2013 2015 2017 2019 2020 37#388 . and remains at the forefront of environmentally-friendly ... policies, reflected in low air pollution and carbon intensity Ranked #1 in the: WEF Energy Transition Index among Emerging and Developing Countries MSCI Environmental Pillar Index among all countries in the world CO2 Emissions Intensity (1) (kg per 2011 PPP GDP) 0.25 0.2 0.15 0.1 M 0.05 1990 1994 1998 2002 2006 2010 2014 2018 Green Future Index, MIT Technology Review Latin America & Caribbean Uruguay (1) Source: World Bank 38 38#397 The Government is committed to climate action policies The goal is to make economic growth consistent with a pathway towards low greenhouse gas emissions and a climate-resilient economy, through macroeconomic, fiscal and financing policies I I I I Creation of the Ministry of Environment (July, 2020). The Government joins: o The Coalition of Finance Ministers for Climate Action (October, 2020). I I I The Network of Central Banks for Greening the Financial System (November, 2020). I I I I The Helsinski Principles were explicitly incorporated in the 2020-2024 Budget Law, putting climate resilience at the center of the planning and design of economic policies and fiscal management (December, 2020). • The Ministry of Industry and Energy and the Ministry of Finance launched the national road-map for green hydrogen production. Generation of local capacities with Japanese cooperation (JICA). I I I 39#4080 In 2021, the government launched a new roadmap for developing green hydrogen energy production. In April 2020, the MoF of Uruguay and JBIC signed a Memorandum of Understanding to promote environmentally-friendly policies and collaborate on green hydrogen technologies Uruguay's Key Attributes for Becoming an Exporter of Green Hydrogen in the Medium Term #1. Generation Potential Great potential for the generation of electricity from wind and solar photovoltaic energy sources. 1 2 H2 # 2. Capacity of Complementarity High installed capacity of energy factors (approx. 60%) due to complementarity between renewable sources of energies. # 3. Privileged Logistics Location Coast to the Atlantic Ocean and access routes to the entire country. 3 4 Source: Ministry of Industry and Energy and Ministry of Economy and Finance. # 4. Strong Institutions and Predictable Policy Framework Reflected in low credit spread. 40#41Thank you. Hope to see you soon! Viudita Blanca Común (xolmis irupero). Photo credit: Leonardo Colistro#42República Oriental del Uruguay Annex#43Banking sector remains profitable and well-capitalized with high liquidity levels Strong solvency and liquidity position support credit measures of the Central Bank and the sovereign-guaranteed loan program. Solvency and liquidity of the banking system Banking system's balance sheet exposure to non-residents (To the non-financial sector, % of total) 1/ Number of times de minimum regulatory capital 2.1 2.0 1.9 1.8 1.7 1.6 1.5 Liquidity ratio*, in % 60 62 41.5 60.5 40 2,0 20 58 56 2001 54 20 18.1 52 15 10 50 5 1.4 48 48 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 (*) Share of liquid assets (up to 30 days) over total assets. Source: Central Bank of Uruguay. 2001 Deposits Loans 9.9 2021* 2.9 2021* 1/ End-period; data for deposits includes only private non-financial sector (*) As of June 2021. 43#44In 2021, Uruguay`s bond issuance has been mostly in local currency with a growing relevance of the domestic market Emerging Markets: Sovereign International Bond Issuances during 2021 (*) (1) (In US$ million, as of end-July) Indonesia Chile Mexico Saudi Arabia Philippines Turkey Pakistan Panama Colombia Oman Peru Dom. Rep. Egypt Ghana Ukraine Ivory Coast Romania Hong Kong Croatia Bahrain Abu Dhabi (UAE) Uruguay Rep. of Benin Russia Malaysia Sharjah (UAE) Mongolia Kenya Senegal Foreign currency Local currency Uruguay: Treasury Notes Issuances in Domestic Market (2) (In US$ million equivalent, as of end-July, 2021) 2,000 Total issuances in domestic market Issuance accumulated through July each year 1,600 1,200 800 400 C Paraguay North Macedonia Armenia Serbia Georgia Maldives 5,000 10,000 (*) For countries with several transactions in multiple currencies during the year, it shows the sum of total amount issued. Excludes European EM countries that have issued in Euros. 15,000 20,000 2012 2014 2016 2018 2020 2021 YTD 44 (1) Source: Bloomberg/(2) Source: Debt Management Unit, Ministry of Economy and Finance of Uruguay.