The Uruguayan Central bank in its second-quarter Monetary Policy report forecasted a 3,5% expansion for the country's economy, the same as the estimate of the Finance ministry, but anticipated higher inflation because of an increase in public rates and commodities.
By S. Pelin Berkmen, Dmitry Gershenson, Luis Herrera Prada, and Jose Torres - Despite the ongoing crisis, Uruguay is taking important steps to address preexisting macroeconomic conditions and lay the foundation for a more resilient, competitive, and stable economy.
Uruguay's Economy minister admitted on Friday that the country will end 2019 with a “very modest growth”, in the range of 0.6%, but was confident the economy would pick up in 2020 when the construction of a new pulp mill, with an investment of at least two billion dollars, is scheduled to start.
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.
Uruguay's deputy tourism minister said that based on current trends the number of international tourist arrivals during the current summer season, which peaks in December and January, should rise by more than 10%.
Uruguay faces seven conditions which are creating a complex scenario and if they are not modified by government, it's most possible the economy is heading for a recession, according to economist Juan Carlos Protasi, a former central bank president.
Brazilian former president Fernando Henrique Cardoso, (1995/2002) said that the serious economic situation faced by Brazil is very complex, will take time to overcome and most surely the impact will be felt in neighboring Uruguay, a country which must target other markets, other economic spaces.
Uruguay's economy is strong enough to navigate in a challenging global and regional environment in which the U.S. dollar is strong and inflation is starting to rise, Uruguayan Central Bank, (BCU), chairman Mario Bergara said during a conference in Montevideo where he discussed the central bank's mission in the current world environment.
Private consultants forecast the Uruguayan economy will expand 2.5% in 2015, compared to 3.5% the previous year, but recommend a strong moderation in government spending to retake the path of sustained growth and contain the consequences of an adverse international scenario mostly recessive.
Uruguay's GDP expanded a strong 3.5% during 2014 over the previous year, with positive activity in most sectors of the Mercosur member economy, according to the latest report from the Central bank. The result was in line with government officials expectations of 3% growth last year.