The state body highlighted that the war conflicts in Europe and the Middle East put upward pressure on prices.
He Central Bank of Uruguay (BCU) warned that geopolitical tensions are reigniting the inflation worldwide, since it observes that the war conflicts that take place in Europe and Middle East are generating upward pressure on average prices.
In the last minute of the Monetary Policy Committee (Copom) of the BCU, the state body highlights that the combat fronts in the Middle East, as well as the war that is taking place in Ukraineare harming price stability around the world.
Therefore, they point out that USA is facing difficulties in achieving convergence of its inflation to the 2% goal, mainly due to a slow decline in the core component and increases in raw material prices, as well as marketing and transportation costs.
In this sense, they point out that in the month of March, the Federal Reserve (Fed) maintained the interest rate between 5.25% and 5.5% for the fifth consecutive meeting, and it is expected that fewer cuts will be made in the remainder of the year.
According to the BCU, the economy of the North American country exhibits “certain dynamism” and it is expected that the European Union (EU) and the other countries of the old continent will experience reactivations in the final stretch of 2024.
The global economy continues in a slowdown process
As in previous months, at a global level, activity in the main economies continues to slow down, although this does not imply, a priori, future recession scenarios.
Uruguay closed 2023 with an average growth of the Gross Domestic Product (GDP) of 0.4% and expects the economy to maintain a growing behavior during the next two semesters.
In Chinathe inflation remains at levels close to zero, despite the fact that it suffered a temporary rebound. Regarding the region, Brazil corrected its growth projection upwards, while Argentina showed improvements in the financial context, but a deterioration in its real economy.
Source: Ambito
