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Uruguay watching Russia's 'perfect storm' closely

Tuesday, December 30th 2014 - 07:53 UTC
Full article 6 comments
Vicepresident Danilo Astori will become Economy Minister March 1st. Vicepresident Danilo Astori will become Economy Minister March 1st.

Uruguay's Economy Minister Mario Bergara and Vicepresident Danilo Astori agree on how Russia's situation will affect the South American country's trade balance and whether it may or may not have a direct impact on beef exports.

 Russia is going through its worst economic crisis since 1998, the ruble dropping 50% against the US dollar. Russia's Central Bank has already increased interest rates and President Vladimir Putin has warned that people should get ready for two tough years ahead, following the plummeting of oil's international price.

Still, the Putin administration finds the reason to its problems in the sanctions imposed by the United States and the European Union for its intervention in Ukraine. To make matters worse, these measures are not to be lifted for as long as Russia continues to support Kiev's rivals.

The latest measures involved the application of limits on financial access to bank Sberbank which controls 25 % of banking assets in the country. Last week, Russia had to disburse 530 million US dollars so that Trust Bank, for whom actor Bruce Willis has been campaigning, would not halt operations.

Russia's finance minister Anton Siluanov said on Monday that in 2015 the GDP might shrink by 4% and the budget deficit could be 3% as a consequence of the falls of the price of oil and the ruble and called for further budget cuts.

Saxo Bank's chief economist Steen Jakobsen has said Russia was under “a perfect storm” which might lead to “state companies or to the very government falling selectively into a default.”

Last week, Bergara explained that “everything points to oil price being at its lowest in the past eight years,” which could be beneficial for Uruguay as an importer of oil. “But the drop in oil price can impact the demand on commodities,” like in the case of Russia, who buys beef from Uruguay. He also explained that the world is moving to a higher dollar as a result of monetary policies from the Federal Reserve.

Astori concurred and added that the price of oil is “a new geopolitical factor.” He also said that regardless of what happens with Russia, Uruguay is well prepared for the coming years because it has diversified the markets to which it exports its goods.

When President-elect Tabare Vazquez takes office on March 1, Astori will become Uruguay's new economy minister.

Top Comments

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  • Chicureo

    Nice to see that the new minister has a clear and sane understanding of what's happening in the world today. ...meanwhile, across the River Plate, the plan is to squander wheat, soy, meat and hard currency for old Soviet tugboats and attack fighters...

    Dec 30th, 2014 - 09:37 am 0
  • ChrisR

    @ 1

    It would be great if the new president and the new economy minister get cheap oil for our exports.

    We might just see a drop in the fuel price for once. Nafta has climbed relentlessly for three and a half years and ‘No Money Pepe’ putting fuels up 10% unilaterally without discussing it with the Central Bank or any of his ministerial colleagues (I am being generous here) resulted in a broad spectrum price rise in everything by 10%. Pepe was “surprised” and accused “big business” of taking advantage. Unbelievable.

    At least the stupid, old murdering commie bastard won't be president much longer. AND Buggeritupper, the so called economy minister will be going as well: good riddance.

    Dec 30th, 2014 - 12:18 pm 0
  • Briton

    It seems that Russia and China are having more and more influence in south America,

    perhaps in the near future , even the balance of power,
    poor south America [ some] they seem to lumber from one disaster to another,
    first under Spanish rule , then dictators , now Russia and China,
    number 32/16/and 34 should go down well, followed by Russian

    Dec 30th, 2014 - 12:50 pm 0
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