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Serene macro indicators face uncertain political events
URUGUAY · Report · 20 Mar 2024

Uruguay's relatively calm macro indicators contrast with an environment of uncertain upcoming political events. Such political intensity is not only magnified by this year’s presidential election but also by the labor unions trying to reach, before the deadline on April 27, the required 280,000 s...

Uruguay enters an electoral year in a changing regional context
URUGUAY · Report · 26 Dec 2023

How does the recent 180-degree political change in Argentina affect Uruguay, considering that 2024 is an electoral year? Can the political swings across the Rio de la Plata impact Uruguay’s capital or trade flows? And in turn, could they eventually even tint the local political discussion? In ...

The BCU anticipates being close to the end of its easing cycle
URUGUAY · Report · 12 Oct 2023

The BCU's latest rate cut was no surprise as it was aligned with declining inflation. However, the objective of the monetary authorities to convince local market players to de-dollarize the economy suggests that local authorities might keep interest rates higher for a longer time frame than initi...

Is the economy building momentum for a depreciation of the UYU peso?
URUGUAY · Report · 28 Aug 2023

In this report, we examine the reasons for a possible end to the UYU peso's appreciation path. A growing trade deficit, declining external competitiveness linked to falling local activity, and CPI inflation's fall towards the lower end of the BCU inflation target not only lead us to believe that ...

BCU cuts rates by 50bps on a sharp decline in CPI inflation
URUGUAY · Report · 07 Jul 2023

The BCU announced yesterday that it cut the reference interest rate by 50bps, to 10.75%. While a rate cut had been expected (for more information see our June 12 report, “Declining inflation suggests rate cuts will continue”), the monetary authorities decided this time around to implement a more ...

Declining inflation suggests rate cuts will continue
URUGUAY · Report · 12 Jun 2023

While April's trade data reflected worse-than-expected results due to poor export performance, inflation improved significantly in May, particularly the PPI. As reserves and labor productivity remain stable enough to overcome the agricultural export slowdown we see no significant risk in the asse...

The government celebrates the approval of a much-debated SSS reform
URUGUAY · Report · 01 May 2023

After extended negotiations on the Social Security System reform, the bill returned to the Senate where it was finally approved last Thursday. While the final version of the approved bill was somewhat watered down in comparison to the original project, it still improves the country's long-term fi...

Falling inflation on the back of FX strength?
URUGUAY · Forecast · 24 Mar 2023

In February, CPI inflation continued declining, to 7.6%y/y, while Industrial production´s 12-month accumulated growth rate fell to 3.0% y/y. As might have been expected, the BCU decided at its most recent COPOM meeting not to raise the reference interest rate any further, keeping it at the histor...

Lateralizing unemployment, despite economic slow-down
URUGUAY · In Brief · 24 Jan 2023

December unemployment data came out at 7.9%, roughly speaking constant compared with 7.8% in November and the same as the 2022 average. This only modest rise happened despite the current economic slowdown, observed in most activity indices and the monetary tightening implemented by the BCU, which...

The BCU equilibrium between activity, inflation and interest rates
URUGUAY · Report · 17 Jan 2023

We review in this report the latest activity and inflation indicators that determine the BCU interest rate policy in order to get a sense of what to expect from the next COPOM meeting, to be held on February 15, 2023. These indicators reaffirm our perspective that both inflation and growth are de...

Senate approves in general the Social Security System Reform
URUGUAY · In Brief · 28 Dec 2022

In the early hours of today, the Senate approved in general terms the “common pension system bill”, i.e. the social security reform that rises the minimum retirement age from 60 to 65 and represents one of president Luis Lavalle Pou’s (LLP) politically costly, but strategic reform projects. Even ...

BCU interest rate cuts around the corner?
URUGUAY · Report · 27 Dec 2022

Recent declining inflation and activity indicators suggest that the BCU monetary tightening might be coming to an end. Contrary to the last Monetary Policy Committee on November the 15th, where the monetary authorities announced another 50bps hike of the reference rate to 11.25%, we would not be ...

November Producer Price deflation suggests further CPI deceleration
URUGUAY · Report · 30 Nov 2022

Following softer food and energy prices and a somewhat stronger local FX rate, the recently published November Wholesale Price Index registered deflation of -3.5% m/m, reinforcing the October reading of -5.8% m/m. The resulting -0.9% y/y rate is the lowest annual inflation rate since 2017 and a s...

Uruguay confirmed innovative Green Bond issuance and debt swap
URUGUAY · Report · 21 Oct 2022 · 1 response

On October 20, the government confirmed the issuance of an innovative 12-year global dollar-denominated “green-bond”, i.e., a Sovereign Sustainability-Linked Bond (SSLB), indexed to climate change indicators, whose final cash flow depends on whether Uruguay meets certain environmental objectives ...

Webinar replay: Uruguay - Swimming against the regional political current
URUGUAY · Report · 21 Oct 2022

Visit the calendar page to watch the replay of our webinar, "Uruguay - Swimming against the regional political current" and get insight into how the country stands apart from the rest of Latin America with a macro review of Uruguay. The webinar features Esteban Fernández Medrano discussing the U...

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