The Central Bank of Uruguay is keeping its reservations in its analysis of the future of the neighboring country, while keeping a close eye on Brazil.
The Monetary Policy Committee (Copom) of the Central Bank of Uruguay (BCU) warned in its last minutes of the month of August for the persistent macroeconomic uncertainty which is observed in the Argentinamore than 8 months after the start of the government of Javier Milei.
In the document, which was made public on Wednesday but is dated August 16, they highlight that in the neighboring country “the levels of uncertainty at the macroeconomic level remain.” Last month, the analysts of the state agency had observed a slowdown in inflation in Argentinawithin the framework of a decline in the level of economic activity.
A few days ago, the president of the Shopping Center and Industrial of Salto, Guillermo Luzardoexpressed concern about the Blue dollar escalation and a new reactivation of the diversion of consumption to the other side of the Uruguay River.
“2024 had started quite well, the situation had shrunk considerably. price gap with Argentinabut now slowly, over time, the blue dollar has risen and that has led to the exchange rate gap stretching again,” the commercial leader highlighted.
The impact of the Rio Grande do Sul floods was less than expected in Brazil
At the regional level, Copom maintains that high-frequency data in Brazil showed “dynamism” as the impact of the floods in the state of Rio Grande do Sul was lower than expected, correcting upwards expectations of growth for the rest of the year.
On the other hand, the data of inflation were above initial projections, while inflationary expectations have continued to rise in recent times.
As regards the global economic environment, a second quarter was perceived with “signs of deceleration in a context of greater financial volatility”, and an increase in uncertainty due to geopolitical conflicts, mainly in Middle Eastand the increase in the monetary policy rate by the Bank of Japan.
According to the document, in USA the reduction in inflation was greater than anticipated and the labor market began to weaken, while in the Eurozone prices rose more than expected.
Source: Ambito
