MercoPress. South Atlantic News Agency

IMF raises Uruguay’s 2013 growth estimate but lowers 2014 forecast

Inflation and labour costs remain the main challenges

The IMF raised its 2013 economic growth forecast for Uruguay, but lowered its estimates for 2014, saying growth had “moderated to a more sustainable pace” after a decade of strong expansion.

Citing robust domestic demand, strong foreign direct investment and an expected improvement in demand from abroad, the IMF expects Uruguay's economy to grow 4% in 2013 according to a statement released on Friday, up from a previous estimate of 3.8% in May.

Growth should reach “about 3.5%” in 2014 and 2015, the IMF said, down from a prior estimate of 4% for next year.

Uruguay's GDP grew 3.9% in 2012, completing a full decade without a single year of economic contraction.

The IMF cited persistent inflation pressure and strong increases in labour costs as key risks for the Uruguayan economy, and called for tighter fiscal policy and more infrastructure investment as a way to maintain robust economic growth.