Tag: Uruguay economyUruguay economy
Fitch Ratings in March joined two other major ratings agencies in giving Uruguay its coveted investment grade, a move that lowers the nation’s borrowing costs and opens up opportunities for new investors.
Uruguay’s GDP expanded 3.9% last in 2012 over the previous year despite a slight contraction in the fourth quarter, according to a late Wednesday release from the Central bank. The bank’s original estimate was 4%. In 2011 the economy grew a revised 6.5%.
Uruguay’s central bank surprised the market by keeping on hold the benchmark interest rate at 9.25% after increases at the two previous monetary policy meetings failed to slow inflation, one of the country’s main concerns.
The Uruguayan economy expanded between 3% and 3.5% last year which is below the 5.7% of 2011, mostly because of a serious drought and a deteriorating world situation, advanced the country’s Central bank president Mario Bergara.
Uruguay finally managed on Thursday to achieve investment grade debt rating from the three major agencies when Fitch raised the country’s rating to BBB-minus from BB-plus, citing economic resilience as well as the political and social stability of the country, squeezed between Brazil and Argentina.
Uruguay's central bank announced on Wednesday it will raise marginal reserve requirements on local and foreign currency deposits from April 1 as part of its effort to bring inflation within the official target range, which has been missed in the last three years.
“The Uruguayan government is in deep crisis” admitted President Jose Mujica following an open clash between ministers that called for an urgent meeting of the cabinet and half way had to be adjourned on fears that recriminations could get out of control. A recess was ordered but the squabbling through the press continued and the exposed deep rift remains more than a challenge.
Two contrasting views have surfaced in the Uruguayan government regarding inflation which has been steadily climbing and seems so far immune to monetary tools, but is now the second highest in the region behind Argentina.
Uruguay exports increased 9% last year over 2011 reaching 8.751 billion dollars a numerical historic record according to the primary figures released by the Instituto Uruguay XXI, a government funded organization to promote foreign trade. Soybeans, beef and rice remain as Uruguay’s main export items.
The head of an economics think-tank said that the Uruguayan government reactions to his criticisms of the management of the country’s economy are a kind of “authoritarian tick” which pretends to censor all those who do not share the “official truths”.