MercoPress. South Atlantic News Agency

IMF praise for Uruguay but warns about the need of labour flexibility

Uruguayan per capita income has doubled in ten years

The IMF recommended Uruguay greater flexibility in the management of macroeconomic policy, ahead of unexpected changes in the international scenario.

“A flexible policy will be crucial for the coming period”, said the Board of the IMF following a delegation of experts visit to the smallest Mercosur member.
Uruguay is forecasted to expand 6% this year and 4.25% in 2012, according to IMF projections.

Given the international instability, “the main domestic challenge for Uruguay will be to design domestic policies that confront the cyclic demands and the risk of outer negative impacts”, said the IMF text.

Overall the IMF praised the ”excellent” performance of the country’s economy, and its economic course, which has grown sustainedly in recent years, allowing for a doubling of per capita income compared to previous to 2002, when the major crisis.

“The overall prospect is positive but with the risks of slowdown because of a most uncertain world panorama”, added the IMF release.

Uruguay made the right decisions in the first half of the year by tightening monetary policy, plus a good management of deficit and the sustained reduction of debt, but a greater flexibility in the labour market is pending, said the IMF.
 

Uruguayan per capita income has doubled in ten years