A new technical bulletin produced by the Central Bank of Uruguay (BCU) showed that, along with the drop in inflation, market agents had reduced their inflationary expectations during the month of June compared to the May projections.
This view of the private sector about a slowdown in inflation was shared by the specialized analysts consulted by the BCU and the agents of the local financial systemnot so for the businessmenwho remained skeptical of the possibility of a variation.
In June, year-on-year inflation fell to 5.98%being the lowest record since September 2017 and being below the ceiling of the target range established by the BCU.
In that line, the expectation of economic analysts was located at 6.67% during the past month, and that of the financial markets by 7.56%, both below their May projections. Among entrepreneurs, projections remain unchanged at an average of 8% since December 2022.
As for the end of the year, analysts project a 6.55%financial agents a 7.24%the BCU determined an average of 7.26%and businessmen remain in a 8%.
Based on different economic models, inflation projected by the BCU at the end of the monetary policy horizon stands at 5.3%that is, within the target range of between 3% and 6% (for 24-month inflation that has been in force since September 2022).
Inflationary expectations for June were again above the target range
According to the BCU, In June, the average inflation expectations were 7.41% within the private sector.1.41% above the ceiling of the target range.
The Monetary Policy Rate (dwt) was located in July at 10.75%after a cut of 50 basic points that occurred after a meeting of the Monetary Policy Committee (Copom) at the beginning of the current month.
Source: Ambito
