The Canadian firm highlighted that the country overcame the drought and recent economic shocks “relatively well.”
The Canadian rating agency DBRS Morningstar maintained the credit rating of the Uruguay in BBB and confirmed a stable outlook, highlighting that the country overcame the drought and other recent shocks to its economy “relatively well.”
The firm highlighted the country’s stable trend in monetary matters in the short and long term (R2), as well as its “predictable” macroeconomic policy formulation and “solid” government institutions, according to the Ministry of Economy and Finance (MEF).
DBRS Morningstar highlighted that between the last quarter of 2022 and the first half of 2023, the Uruguayan economy successfully weathered “a contraction in agricultural production derived from a serious drought”, as well as “the economic weakness of Argentina and a slowdown in external demand.
However, since grader They assured that “the Uruguayan economy seems on track to recover” supported by a recovery in its agricultural production and a strong labor market.
On the other hand, they recalled that the International Monetary Fund (IMF) The country’s Gross Domestic Product (GDP) growth is expected to be 1.0% in 2023, and up to 3.3% in 2024.
Regarding inflation, they commented that the index moderated after reaching its maximum, helped by the contractionary monetary policy carried out by the Central Bank of Uruguay (BCU).
Uruguay is protected against future economic shocks, according to DBRS Morningstar
Likewise, they pointed out that the fiscal accounts do not present major imbalances, and that ample foreign exchange reserves, as well as conservative management of public debt and solid regulation of the banking system will reinforce the economy’s defenses against future shocks.
In the grader They understand that all these factors counteract the country’s “moderate” levels of productivity, “partially dollarized” finances, and limited financial depth.
Source: Ambito
