Daniela Valenzuelageneral manager of Moody’s spoke about the economic future of Uruguay around the measures taken by the current government and the way in which politics is handled in the country, based on mutual agreements between the opposition and the ruling party.
The macroeconomic situation of the country, according to the general manager of Moody’s for Argentina and Uruguay, in conversation with Bnamericas, it has a robust plan of prudential macroeconomic tools that were implemented after the 2000 crisis.
On the other hand, “the willingness and capacity of the current government to approve reforms that address the macroeconomic imbalancesincluding a reform of the social Security System, they are positive in credit terms.” Although, there are still challenges related to credibility around monetary policy, “due to the difficulty that the authorities have faced in meeting the inflation targets.”
Economic growth for the country
Regarding the possibility of economic growth in the country, Valenzuela assured that for this year it will moderate by 2%, while for the next three years it will be around 2.2 and 2.8%, backed by an improvement in the investment trends.
On the other hand, we will see a “continued recovery of the working market it would also support stronger economic growth over the next three years.” To this, they could accompany it “structural reforms such as greater flexibility in the labor market and an improvement in efficiency and competitiveness through reforms to state companies”, to contribute to greater economic growth.
From Moody’s, established the general manager, they consider that “Uruguay will continue to be supported by comparatively large fiscal buffers and external buffers, as well as risk management practices. actives and pasives Very strong”. In this sense, they hope that the measures of the current government to reduce the fiscal deficit help stabilize doubt metrics for the next three years.
“The credit challenges they include structural rigidities in the composition of government spending and a relatively high, although decreased, proportion of government debt in foreign currency and dollarization of the financial system,” added Valenzuela.
The political future of Uruguay
Next year it is elections in the country and it is questioned whether the winner of the elections will continue with the economic projects of this government. In this sense, the manager of Moody’s He assured that they expect a “broad continuity of policies and a continuous commitment to fiscal consolidation.”
Regarding this, Valenzuela remarked that the political actors “have demonstrated a constant and continuous preference for the consensus building around policy formulation.
“Successive administrations have repeatedly endorsed the principles that have led to conservative economic policies and to the maintenance of the macroeconomic stability of the country”, he added.
Source: Ambito
