The President of the Republic, Luis Lacalle Pou, the ministers Pablo Mieres (Labour) and Azucena Arbeleche (Economy), and the director of the Planning and Budget Office (OPP), Isaac Alfie, gave a press conference to inform two proposals to alleviate the loss of purchasing power.
Within the framework of the conference, Lacalle recalled some measures that the government has taken, such as: “support in credit matters, exemptions based on partial insurance and normal unemployment insurance.”
He said that “jobs have been recovered”, and there has been “economic growth based on exports and industrial production, which brought with it an increase in collection”; but as a result of the war in Ukraine there has been inflationary pressure throughout the world.
“The government’s concern is that Uruguayans do not lose purchasing power, for which we have had a sustainable and responsible economic policy that allows us to take some measures and suggest actions,” he said.
Suggestions
In this sense, he said that this Tuesday, April 19, Minister Mieres will convene the Superior Tripartite Council to convene 88 negotiating tables in which there was no agreement, which involves some 300,000 workers from the private sector, to advance the Inflation adjustment.
Last year the ninth round was opened, which meant the “salary negotiation for two years for 600,000 workers, of almost 200 tables, a good part of them agreed adjustments for inflation per year or 18 months, but 40% of those tables agreed a adjustment for inflation to July 2023, so it is for them that the government is suggesting looking at the possibility (decision that the parties must make) of advancing the adjustment for inflation to this year.
Measures
Among the measures, the government decided to add 3% to liabilities and 2% to public workers to the increase granted at the beginning of the year.
“We try to find the best possible and most effective tools so as not to lose purchasing power,” said Lacalle Pou.
He added: “Among the increases granted to retirees and pensioners as well as to public workers, we would be above 9%, which, in principle, would be above the expected annual inflation and this ensures that we put more money in the pockets of Uruguayans to not lose purchasing power. The increases will be effective July 1.
Proposals of the parties
Regarding the different proposals put forward by the ruling and opposition parties to exempt VAT on 19 products from the food basket for six months and on debit card purchases, the president said that some of the suggestions have been taken.
“But the announced proposal goes directly to the problem, because acting on prices does not mean that they are necessarily impacted; instead, this is more money to alleviate the loss of purchasing power”, said Lacalle
In any case, he recalled that measures have been taken on some prices (strip roast, noodles and baked goods) for a month and, in his opinion, they should be extended only once, but he said that the decision will be up to the Economy.
“In fact, we would begin to recover salary, among other things because with this aggregate increase in pensions, pensions and public salaries, we should be above the expected inflation,” he added.
He added that the private sector workers’ negotiating tables will also meet and the agreed salary schedule would imply a “recovery component.”
Poverty
When asked about the increase in poverty in children and adolescents compared to 2019, he replied that “the situation of weakness of hundreds of thousands of Uruguayans as of March 1, 2020 was such that when the pandemic began, poverty increased and there were people with a very high level of fragility.
“I am not making excuses, simply observing a reality. The government within its tools has made a great effort, because it allocated 1,700 million dollars, much of which to especially more vulnerable sectors. In the last Rendering of Accounts, which was basically zero spending, early childhood had very important support, ”he added.
He added: “We have handled exact figures, we do not invent numbers, there may be discussion on how the stripes are taken but we announce when poverty increased and when it fell and that should not be a spoil of electoral or political discussion. We are on the path of reducing the number of Uruguayans living in poverty. With all due respect to the analysts, I do not look at poverty in percentages, numbers and in what range they are, but rather if there are people who are in unworthy conditions and that is our objective”.
