The inflation expectations of businessmen fell for the third consecutive time and reached their historical minimum, anticipating a CPI in the order of 6% at the end of the year, according to the latest survey of the INE.
The median of the responses was thus reduced by 20 basis points with respect to the Business Expectations Survey(EEA) of the previous month, but they were also located for the first time in the target range and in this way the projections of the private sector begin to align with those of the Central Bank of Uruguay (BCU).
Something similar occurs with the forecasts for the moving year closed in March 2025, which stood at 6.3%, just above the target range, but 70 basis points below the 7% of the previous EEA.
Although businessmen were sensitive to the drastic reduction in inflation, which has been below 6% annually for 11 months, they avoided maintaining that figure over time, since for the moving year closed in March 2026 they maintained their forecast of 7%, perhaps due to the uncertainty posed in the future by the result of the elections 2024.
Finally, the expected variation of the operating costs of companies remained at 7% for 2024, the same figure expected for the next 12 months, which in that case represents a drop of 30 basis points. More sensitive is the reduction of 80 basis points for April 2025 – March 2026, with estimated costs of 7.2%.
The expectations of the private sector are beginning to align with those of the BCU
In this way, at a time when it is beginning to be debated whether progress can be made towards a more ambitious inflation objective, the private sector begin to align your expectations with those of the BCU.
In fact, in the last Monetary Policy Report (IPoM), the BCU revised downward the projections in the short/medium term and anticipated that the CPI will remain within the target range for the next 24 months, expecting it to be at 5.6% year-on-year by March 2026.
Faced with the success of the monetary politics In the fight against inflation, some analysts are beginning to suggest that the target range could be narrowed and reach a level between 2% and 5%, with an optimal level of 3.5%.
Source: Ambito
