Analysts and public and private institutions that participated in the Central Bank’s (BCU) expectations survey once again revised downward their forecasts for growth for the Uruguayan economy in 2023.
In the median response to the query conducted in May, expected growth is now 1.45%, from 1.5% in April. It is the sixth consecutive downward adjustment since November, when projected growth was 3%.
Last year the Uruguayan economy grew 4.9% on average, but entered a technical recession during the second semester.
The main negative effect for the year is associated with the droughtbut there are other factors that also have an impact, such as the lower dynamism of the export sector and the shutdown of the Ancap refinery for four months.
The latest projections presented by the Executive Branch suggest that activity will grow again this year, but at a rate of 2%. The figure is one percentage point below what was stipulated in the last Rendering of Accounts.
The Minister of Economy and Finance, Azucena Arbeleche, stated last week that the growth projection remains at 2%, although “perhaps” it could be “a little lower,” she acknowledged.
For his part, The Monetary Policy Committee of the Central Bank (BCU) pointed out this week that in Uruguay, Growth in economic activity is expected in the first quarter of the year, but not in the second quarter, which would be affected by the production supply shock as a result of the drought.
Inflation
For the end of the year, the median of responses projects inflation of 7.5%, from a projected 7.27% last month. Meanwhile, the expected inflation for the 24-month horizon –relevant for monetary policy– fell slightly more than one tenth to 6.71%, that is, above the ceiling of the target range (6%).
the value of the dollar
The analysts who responded to the BCU query expect an exchange rate of $40.4 by the end of October, and $41 by the end of the year. The currency traded this Wednesday at $38.9 on the interbank average.
