Uruguay expects to reduce poverty to 12.1 percent of the population by the end of 2012, according to the Economy and Finance Ministry.
Figures released by the ministry on Wednesday indicated that the 2012 target would mark a 1.6-percentage-point decrease from the 13.7 percent of 2011.
"The period of systematic reduction of the poverty rate, which has lasted several years, will be extended," said Andres Masoller, head of the ministry's Macroeconomic Advisory Office.
"Based on figures from the first half of 2012, we believe poverty will decrease another 1.5 percentage points," Masoller told a gathering of businesspeople from the Association of Marketing Leaders in Montevideo.
The official said Uruguay will also register better indicators in the reduction of social inequity on the zero-to-one Gini Index, where zero designates an egalitarian society while one is the opposite.
In 2011, Uruguay went from 0.421 to 0.401 on the index.
The official also warned against cutting public spending, saying "to cut expenditure at this time could severely affect the poverty and income distribution indicators."
"That would mean going backwards where the country has made progress," Masoller told reporters after his speech.
Uruguay reduced poverty by almost 5 percentage points in 2011 from the 18.6 percent in 2010, marking the largest decrease in three years.
When he took office in March 2010, Uruguayan President Jose Mujica pledged to reduce the poverty rate to 10 percent and eliminate extreme poverty by the end of his term in 2015.