The minister of Economy and Finance (MEF) Azucena Arbeleche presented the fiscal result and the economic balance of Uruguay 2023, but also presented the projections that the government makes for what will be a good part of its last year in office and the opportunity to finish consolidating the macroeconomic objectives of the administration of Luis Lacalle Pou.
With an optimistic tone due to the good relative results that 2023 had despite the multiple adverse factors that the year presented – listed in a long list during the presentation – and the important data of compliance with the three pillars of the Fiscal Rule For the fourth consecutive year, Arbeleche also spent a few minutes presenting the macroeconomic scenario that the government expects for 2024, which cannot help but be read in an electoral key.
Labor market dynamism
Firstly, the head of the MEF highlighted that the working market will continue to show the dynamism that, during this year, allowed the number of employed people in the country to increase by 37,000 people. According to the ministry’s projections, another 14,000 jobs are expected to be added this year, to continue consolidating, in parallel, the improvement in household income.
On this point, Arbeleche also highlighted the work of the current government in the recovery of the labor market, which had just lost 52,600 jobs during the administration of the Wide Front and that during the crisis generated by the Covid-19 pandemic It also suffered strongly negative impacts. In this regard, he pointed out that from 2019 to 2023 there were 76,100 more employed people.
Moderate growth
On the other hand, the Minister of Economy and Finance also placed the growth of the Gross Domestic Product (GDP) expected for this year by 3.5%; in line with what many international organizations foresee for the country.
Faced with a meager advance of 0.5% during 2023 generated by the historic drought that affected the exports, the water crisis, exchange difference with Argentina, and the situation of International Trade —marked by lower demand and falling commodity prices—; The projection is positive.
The government’s estimate is even slightly above what it predicts, for example, the world Bank —which in January corrected its forecast upwards from 2.8% to 3.2%— or LatinFocus —whose survey recorded a possible growth of 3%. In any case, all the figures are above the regional average and indicate the path of recovery that Uruguay would take this year.
Inflation within target range
Finally, and unsurprisingly since it is a figure that was previously published, Arbeleche maintained that the inflation expected at the end of December 2024 will be 4.9%.
This number had already been estimated and agreed upon by the Macroeconomic Coordination Committee —made up of the MEF and the Central Bank of Uruguay (BCU)—, who also maintained the range goal between 3% and 6% until the end of 2025.
Inflation control was one of the main points highlighted by Arbeleche in his presentation—the Consumer Price Index (CPI) has been below the 6% target limit of the government’s economic team for eight consecutive months—while contributing significantly to improving household incomes and the recovery of real wages.
Source: Ambito
