MercoPress. South Atlantic News Agency

Uruguay enjoys solid situation, boasts Minister Astori

Uruguayan economy forecasted to grow 8.5% said Astori

Uruguayan Economy minister Danilo Astori who next week steps down to return to his Senate bench and hopefully to become the presidential candidate for the ruling coalition, said that a balanced budget “has no political color be it left or right” and anticipated that this will be a record growth year for the economy.

"Nobody any longer discusses if a balanced budget is left or right (ideology). You must have equilibrium. Nobody discusses that inflation has serious consequences for the whole community…defending an inflationary situation with left banners belongs to the past" said Astori during a conference before 200 Argentine and Uruguayan businessmen. However he admitted that the world is going through a period of uncertainty and financial turbulence, but Uruguay's position is solid and prepared for such circumstances. Astori said Uruguay "has left behind fiscal disorders and inflationary episodes" adding that currently discussions are "whether half a percentage point more or less of inflation" and "long gone are the days of 5% GDP deficit". Astori, who is President Tabare Vazquez favorite choice for presidential candidate, said that Uruguay's fiscal deficit in the last twelve months was 0.5% of GDP and in 2009 "will be even lower". Replying to critics about increased government spending, Astori admitted the observation but underlined it was below GDP growth so "it actually dropped in relative terms". The tendency in Uruguay is to the "elimination of deficits" and high primary surplus. "We are going to finish the five year mandate with government accounts balanced", he pointed out recalling that "this has not happened in the country for decades". Finally he anticipated that economic growth in 2008 would be the highest in the five year period, above 8.5%, "exceptionally high", Uruguay's economy expanded 6.6% in 2005; 7% in 2006; 7.4% in 2007 and in the first quarter of this year, 10.8%. The original Central Bank target was 5.25% but private analysts estimate 7.5%. Uruguay's electoral cycle will begin on June 28 2009, with open and simultaneous primaries that formally determine the candidates for each party (though the ruling coalition will settle on its pick by December this year). On October 25, 2009 general elections will be held for president and the full Congress, with a run-off in November if the leading candidate fails to gain an absolute majority. Even with inflationary pressures mounting the ruling coalition is believed to have the upper hand, barring a large-scale economic upset. However, if President Vazquez insists in imposing Astori on his party the price he pays might be a serious internal split, threatening the 2009 victory.