The fiscal deficit was 3.4% in February

The fiscal deficit was 3.4% in February

Uruguay maintained a fiscal deficit of 3.4% of the Gross Domestic Product (GDP) in February, compared to a year ago, according to the Ministry of Economy and Finance (MEF) in relation to the state of public accounts.

The percentage released by the government excludes income from the Social Security Trust (FSS).

On the other hand, the income of the Central Government – ​​Social Welfare Bank (BPS) they stood at 25.9% of GDP. This represents a slight drop of 0.2% compared to the 12 months prior to January. Meanwhile, interest payments closed at 2.3% and increased 0.1% compared to the previous month.

The result of the public enterprises, likewise, it was located at 0.3% of GDP.

The MEF pointed out that the result of the overall public sector it was -3.2% and, adjusted for the effect of the FSS, it stood at -3.4% of GDP.

A praise and a warning from the IMF

At the end of March, the International Monetary Fund (IMF) published its assessment of the Uruguayan economy after the consultation mission and praised the “solid track record of the authorities in implementing sound macroeconomic policies —in an uncertain context— has improved the country’s resilience to shocks.”

In this sense, the international organization highlighted the efforts of the government in terms of fiscal consolidation and the solidity in the fulfillment of the objectives of the tax Rule, established through the Law of Urgent Consideration (LUC)just over a year ago.

However, one of the warning signs they left behind in the country was the debt levels, which are historically high in relation to GDP. In this regard, the IMF recommends taking the debt of the Non-Financial Public System to a range between 50 and 55% of GDP. Today the relationship between the gross debt of the Non-monetary Public Sector and the GDP is at 62%, after the increase in the deficit due to the pandemic.

The Uruguayan State currently pays the equivalent of some 1.7 billion dollars in debt interest, most of which corresponds to the Non-Financial Public Sector. 47% of public debt is in dollars and 94% is at a fixed rate with an average maturity of 12.3 years. This reduces vulnerability to the current rate increase at the international level. The average rate in dollars paid by Uruguay is 5%, according to the MEF.

Source: Ambito

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