MercoPress. South Atlantic News Agency

Uruguay: Finances don't grow; Economy Minister estimates an improvement for the second semester, as Macri did

The government of Uruguay recognizes that it must work to resume better levels of growth. Provide greater incentives to investors and entrepreneurs was the method set to change the course.

Uruguay is experiencing, in recent months, a marked drop in investment and the generation of employment. Uruguayan Economy Minister Danilo Astori admitted Wednesday the fall of public accounts, with an annualized fiscal deficit in April that was 4.8% of GDP, and opted to provide greater incentives to investors and entrepreneurs. The Uruguayan press accuses the government of betting on the hope that the results will begin to be felt in the second half of the year, as it was heard a while ago in Argentina under the administration of President Mauricio Macri.

The government of Uruguay recognizes that it must work on both aspects to resume better levels of growth. Provide greater incentives to investors and entrepreneurs was the method set to change the course. During a meeting organized by the Confederation of business chambers Somos Uruguay, Astori acknowledged, four months after the presidential elections in the country, that for years there has been a drop in investment levels, decreasing the generation of employment.

The minister recalled the measures that were implemented two years ago with the aim of stimulating investment and that the results are now expected to arrive in the coming months.

“The ability of the economy to create jobs is the main indicator of the labor market and we have problems because in recent years that rate has been falling,” said the minister.

Astori added that ”the measures (to encourage investment) will surely pay off as of the second half of 2019.“

The sayings of the official recalled some parallelism with Macri words, when he took the power of the government in his country and the recovery of the economy did not come as quickly as he projected.

The situation of Uruguay's finances is far from that of the Mercosur partner, although the economic team of government recognizes that in recent months the economy has not grown.

After assuming, the president and his team mentioned the ”second semester“ as the stage in which the economic recovery would begin. However, Argentina continued on the negative path with bad economic indicators, reaching a new phase of recession.

In Uruguay, the annualized fiscal deficit reached its worst record in more than two decades. This Wednesday, Astori made mention of the red numbers of public accounts. ”You can not ignore that we have a challenging fiscal issue. Uruguay has a high imbalance that must be fought; combat with which we are totally committed,“ he said.

He added that ”many times in the public debate the fiscal deficit appears associated with spending and forgetting that there is another factor that influences: income“. To improve them, two paths can be traveled, he said. ”Increasing taxes, which we won't do, or increasing the level of activity, something that we are becoming our main challenge,” he said.