Companies maintained their projection of 8% inflation for 2022amid the recent rise in the CPI and the interest rate increase policy of the Central Bank (BCU)).
In addition, they also expect an acceleration of the prices of 8% at 24 monthsaccording to the results of the Survey of Business Expectations published by the National Institute of Statistics (INE) this Tuesday. It is the ninth consecutive measurement that employers respond with the same numbers.
The projection of the median of the entrepreneurs was well above what was estimated by private analysts and even more in relation to official forecasts.
The private agents who participated in the last monthly survey of the BCU foresee a inflation of 7.1% this year and 6.6% the next. For his part, the economic team is confident that the annual increase in prices will moderate and reach 5.8% in 2022 and 4.7% in 2023.
For 2024 there is no data from businessmen, but analysts and authorities project 6.2% and 3.7%, respectively.
Inflation closed the previous year at 7.96% and is currently at 8.85%. In 2020, the figure stood at 9.41%, so dropped almost a point and a half in 2021, but still remained above the target range of 3% to 7% set by the authorities. This year the range will become more demanding and its upper limit will drop to 6% in September.
Last month, the president of the BCU Diego Labat declared that the expectations of the agents—misaligned from the official goal— they worry about more than inflation itself. “At the end of the road, those who form expectations end up forming prices. The same goes for the salary negotiations: If expectations are at 6.6% (which was what the BCU survey showed to analysts), the workers are going to ask for a 6.6% increase and the Entrepreneurs are also going to raise prices at 6.6%” he maintained in an interview with In perspective of Radioworld.
On February 16, one day before Labat’s statements, the Central Bank increased the Monetary Policy Rate (MPR) for the fifth consecutive time and confirmed that it will do so again at the next session of the Monetary Policy Committee on April 8. With these guidelines, the monetary authority perceives itself “on the path that implies the convergence of expectations to the objective.”
The increase in the TPM in February was 75 basis points —from 6.5% to 7.25%— and the institution assured that the measure, added to a macroeconomic scenario that it evaluated “favorably”, will lower analysts’ inflation estimates, which “will be reflected in the next measurements of expectations” which will be known on March 29, said the BCU.
Instead, according to the specialized portal Bloomberg Line, “both the consulting firm Exante and Grant Thornton Uruguay and the Center for Economic Research (Cinve) they are working on correcting their inflation expectations upwards by the end of the year, on a path that is expected also visit other reference consultants and analysts in the Uruguayan market”.
