Businessmen reduced their inflation expectations for 2024

Businessmen reduced their inflation expectations for 2024

The survey prepared monthly by the UNE reflected a cut of 50 basis points in the private sector’s forecasts.

The inflation expectations of the businessmen were reduced 50 basis points compared to last month, but remain above the target range foreseen by the Central Bank of Uruguay (BCU), according to the study published today by the INE.

The Business Expectations Survey revealed that in the private sector they expect a CPI in the order of 6.5% both for 2024 and for the next 12 months, above the level of inflation current, which has been below 6% for nine months, the ceiling established by the BCU.

Meanwhile, the businessmen expressed their inflation expectation for the moving year closed in January 2026 and kept it at 7%, without changes in relation to what the sector expected for the calendar year of 2025.

Meanwhile, the median of the expected variation of the operating costs of companies was 7.2% for 2024, showing a cut similar to that of the CPI, of 0.5%. Meanwhile, for the next 12 months they anticipate 7.4% and 8% for the period February 2025-January 2026.

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Inflation remains within the target range, but a rebound is expected

After the latest data from the INE, published this Tuesday, the inflation is 4.71% annually in Uruguay, with its second consecutive decline and going through a period of stability, with nine consecutive months within the target range of between 3% and 6%.

In this scenario, the forecasts of the different economic agents have been reduced in recent quarters, but without converging with the current levels shown by the CPI.

This delay in the readjustments of expectations may have to do with the estimation of different consulting firms that the inflation could experience a rebound during the second semester, even exceeding 6%.

In this regard, the Economic Research Center (Cinve) anticipated that inflation would reach 6.3% in July and would remain above the target range for the rest of 2024.

Thus, we will have to wait for what behavior the BCU defines at the next meeting of the Monetary Policy Committee (Copom), which in the last meeting maintained the MPR at 9% and seems to have ended the downward cycle of the interest rate.

Source: Ambito

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