MercoPress. South Atlantic News Agency

Uruguayan economic growth expected to continue

“One cannot follow the neighbors in everything they do,” Labat said about Argentina

Uruguay's Central Bank (BCU) President Diego Labat said Tuesday that he expected economic growth to remain steady and heralded that inflation by the end of 2022 will be below the level “we have today.”

Labat also explained that the BCU was monitoring the crisis in the region with concern, but insisted his country's “economy has been growing well.”

“The second quarter was very good and the third quarter with good indicators in general terms, maybe not such a strong growth as the second quarter but a good activity in general terms,” he added.

“This second part of the year inflation is starting to decrease a little, we are going to end the year outside the [targeted] range but with a lower inflation level than the one we have today, we are already starting to see some signs of inflation deceleration,” he also pointed out. The BCU's target range is between 3% and 7%, and next month it is expected to be already between 3% and 6%.

Regional economy concern BCU authorities, who are following with special attention what is happening in Argentina, a country riddled with “uncertainties, that especially has effects on the border,” Labat stressed.

“In any case, one has to be careful because one cannot follow the neighbors in everything they do, so one has to be careful and very cautious, analyze and be very attentive and in that the Central Bank is absolutely attentive and follows every detail of the situation,” he pointed out.

The latest BCU data showed an 8.3% growth of the economy in the first quarter of the year, compared to the same period of 2021. When compared to the previous quarter (October-December 2021), growth was 0.6%.

The BCU will publish data for the second quarter of 2022 on September 15. According to the August survey of economic projections, the main references foresee a growth of 4.7% in 2022, 3% in 2023, and 2.5% in 2024, which would confirm the expansion of the economy, albeit at a slower pace.

“The ideal [scenario] for Uruguay would be to have a thriving, prosperous region with strong growth, which it does not have today,” Labat lamented.

He also pointed out that the BCU has not been involved in the exchange rate between the Uruguayan peso and the US dollar since August 31 last year.