The International Monetary Fund has forecast an economic recovery in 2024 but has set its sights on public accounts and the fiscal rule.
The directory of the International Monetary Fund (IMF) concluded its annual review of Uruguay and approved the evaluation carried out by the technical staff of the organization at the beginning of May. While it predicted an improvement in the economy during this year after a 2023 marked by the drought historical and “adverse external winds” such as the economic situation of Argentina or commodity prices; he also warned about the need for the government to improve the current state of national accounts and the debt-to-gross domestic product (GDP) ratio.
The annual review report of the IMF, As usual, there are lights and shadows; or, rather, green lights and yellow lights that are already known among the authorities of both the organization and the government. Thus, in the statement released this Thursday, the Fund announced that it approved the evaluation carried out by its technical staff in May, but requested “additional efforts” in relation to the public accounts.
Higher growth and inflation within the target range
Among the positive aspects highlighted by the IMF, he economy growing in 2024 was one of them: “In 2023, Uruguay had to deal with the impact of a drought severe crisis unique in its century and adverse external winds, but the economy remained resilient thanks to the solid macroeconomic policies of the authorities, the political stability of the country and the strength of its institutions,” the report said.
The “significant improvement of the frameworks of fiscal and monetary policy“, as well as progress in “structural reforms” “Decisive” were key in this sense, and also decisive in changing the economic trend for this year.
Refering to inflation, Although he warned that there will be a certain rebound in relation to the figures that have been given, he assured that it will remain at the same level. target range.
The fiscal rule, in the spotlight
Although the IMF He stressed the fulfillment of the fiscal rule last year, he also asked the government to make “additional efforts” to improve the situation of public accounts. The news comes just days after the Ministry of Economy and Finance (MEF) will make an adjustment to the fiscal projections established in February for this year, which raises even more alarm bells.
In developing the approach to fiscal framework In one of the points of the statement, the executive board of the organization noted that “additional efforts are required to ensure a sustained downward trajectory of the debt-to-GDP ratio and rebuild fiscal reserves in the medium term, which requires lower goals for the pillars of structural balance and net debt of the fiscal rule.”
“Improving the fiscal framework would help consolidate recent progress in terms of credibility,” he added, and said he hopes that “the reform of the pension system, approved in May 2023, will stabilize spending in the medium term.” “The consolidation of these advances should be the most important priority,” he insisted. IMF.
Source: Ambito
