According to a recent report published by the National Institute of Statistics (INE) of Uruguay, a rapid collapse of the nation's demographic structure is imminent. With the acceleration of birth rate decline since 2015, Uruguay is currently facing the most severe demographic crisis among Latin American countries. In 2023, the Total Fertility Rate (TFR) hit a historic low of 1.27, far below the population replacement level of 2.1.

Last year, the annual number of births in Uruguay was 31,381, the lowest figure in decades. For the fourth consecutive year, the number of deaths has exceeded the number of births, making the natural decrease of the population a reality. Uruguay's population, currently around 3.4 million, peaked in 2020 and has since entered a phase of decline. It is projected to decrease by approximately 510,000 by 2070, stabilizing the total population around the 3 million mark.

This sharp decline in fertility is a result of a combination of complex factors, including the decrease in the population of women of childbearing age due to aging, coupled with increased female labor force participation (rising from 30% in 1981 to approximately 60% in 2016), higher education levels, and the increasing cost of living. The 'Second Demographic Transition,' characterized by rising divorce rates and a focus on career advancement, along with extreme urbanization where 95% of the population resides in cities, further concentrates these social dynamics.

Population aging is accelerating, with the proportion of the population aged 65 and over projected to more than double from the current 15.8% to 32.5% by 2070, and the median age rising close to 50. This is expected to nearly double pension spending as a percentage of GDP by 2100 and lead to increased healthcare expenditures due to the rise in chronic diseases, significantly weakening the potential for national economic growth.

Uruguay must utilize the temporary 'demographic dividend' period, during which the proportion of the working-age population remains high (until approximately 2035), to reallocate public resources towards improving the quality of education. Policymakers are urged to actively implement pro-natalist and labor policies to mitigate these future risks. Key measures proposed include raising the retirement age, attracting skilled immigrants, increasing investment in childcare, and promoting technological innovation. Specific policy actions, such as the expansion of paternal leave, are also being discussed. Uruguay, along with its neighbor Chile, is identified as the country in Latin America set to experience the fastest and most significant population decline, making a fundamental national response an urgent necessity.

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