Uruguay: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Uruguay

IMF Staff Country Reports, February 22, 2019

Source details

Canonical URL: Uruguay: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Uruguay

The Article IV Consultation highlights that Uruguay has preserved macroeconomic stability in the wake of the turbulence in the region due to prudent policies and the accumulation of buffers over the years.
With the worsening outlook and less friendly external environment, in the near term, policies should focus on maintaining resilience.
Additional efforts are needed to put debt on a firm downward trajectory and reduce inflation to within the target band.
The IMF staff assesses that the external position is broadly consistent with fundamentals and desirable policy settings.
Authorities and IMF staff remain in broad agreement on macroeconomic policy objectives: maintaining public debt on a sustainable trajectory, keeping inflation low, and allowing the exchange rate to adjust in line with fundamentals.
Fiscal adjustment has not proceeded as quickly as originally expected, and inflation has proven difficult to contain within the authorities’ target range.

Macroeconomic stability has been preserved through prudent policies and accumulated buffers.
External position: broadly consistent with fundamentals and desirable policy settings (per IMF staff assessment).
Fiscal adjustment: slower than originally expected.
Inflation: difficult to contain within the authorities’ target range.
Policy focus in the near term: maintaining resilience given a worsening outlook and less friendly external environment.

Prioritize policies that maintain macroeconomic resilience in the near term.
Undertake additional efforts to put public debt on a firm downward trajectory.
Reduce inflation to within the target band.
Allow the exchange rate to adjust in line with fundamentals while pursuing low inflation and sustainable public debt.

Subjects: Banking, Economic sectors, External debt, Financial services, Fiscal policy, Fiscal stance, Inflation, Prices, Public debt, Public sector
Keywords: annex I.External sector assessment, asset, bank assets, Caribbean, center, consumer price index, CR, Fiscal stance, Global, growth outlook, I.External sector assessment, IMF's transparency policy, Inflation, inflation expectation, ISCR, liability positions vis-à-vis nonresident, merchandise export, Public sector, public-sector asset-liability management, Uruguay, Uruguay's case, Uruguay's export, Uruguay's exposure, Uruguay's growth