IMF congratulated Uruguay on handling pandemic crisis and revised upward growth forecast

The International Monetary Fund (IMF) on Wednesday congratulated Uruguay on its handling of the crisis of the covid-19 pandemic and revised upwards its growth forecasts for this year, encourage the government of Luis Lacalle Pou to continue promoting its reform program.

At the end of the annual visit under Article IV, as the periodic consultations on the economy of member countries are known, the technical staff of the International Monetary Fund (IMF) congratulated the authorities “for the prudence in the macroeconomic management of the crisis”.

The mission, which will submit its report to the Fund’s board of directors, underlined complete anticovid vaccination coverage of around 77% of the population, and early signs of an upturn in activity and employment in the coming quarters.

For Uruguay, a small country in the American Southern Cone of 3.4 million inhabitants, The IMF forecasts economic growth of 3.4% in 2021, against 3% expected in May after a virtual visit with the Lacalle Pou government.

GDP expansion is estimated at 3.2% by 2022, possibly supported by the reopening of borders and the resumption of tourism.

On the other hand, inflation of 7.2% is expected at the end of 2021, with a drop to 5.8% at the end of 2022.

“A very effective economic policy response has succeeded in mitigating the impact of the pandemic”IMF staff said.

However, the mission called for a gradual reorientation of policies to reduce “pre-existing macroeconomic imbalances”, which the crisis has exacerbated, and “to tackle structural brakes to growth”.

In the short term, he said, “efforts should be aimed at rebuilding fiscal space”, while in the medium term “an additional fiscal effort would be desirable to put public debt back on a solid downward path”.

IMF experts applauded the new domestic fuel pricing formula and the exploration of new trade deals, and said Uruguay’s commitment to the environment was “laudable.”

“Continuing to advance the authorities’ reform agenda is essential to boost growth,” they said.

On November 1, Uruguay is preparing for the total opening of the borders, decision announced by the government of Luis Lacalle Pou. To this is added that Health authorities in the South American country have decided that the validity period of vaccines for non-resident foreigners will be reduced from six months to nine for validation.

Last Monday, a decree signed by the Uruguayan president states that “people who certify having received the single dose or both doses against the SARS CoV-2 virus approved by their country of origin, during the last nine months preceding the shipment or arrival in the country and once the respective waiting periods have been fulfilled to obtain effective immunity, they will be exempted from completing solitary confinement ”.

(With information from AFP)

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