The International Monetary Fund (IMF) on Thursday praised Uruguay’s political response to the pandemic and advised it to lower inflation, support the recovery and carry out more structural reforms.
In a statement, the institution highlights that Uruguay carried out “one of the most successful vaccination campaigns in the world” and positively values the improvements in their fiscal and monetary frameworks despite the challenges of the pandemic.
But before the uncertainty of the future and “pre-existing structural weaknesses,” insists on “the importance of rebuilding fiscal space while supporting recovery, addressing inflationary pressures, and advancing structural reforms to achieve higher and more inclusive growth.”
By 2021, the IMF expects the Uruguayan economy to grow 3.4%, and 3.2% in 2022.
The fund’s executive board believes that short-term policies should continue to support the recovery and “gradually shift towards fiscal consolidation and debt reduction.”
It highlights “the determination of the authorities to reform the pension system, key to fiscal sustainability and intergenerational equity.”
The directors agree with the report presented by the technical staff that as the economy recovers “support measures should be phased out” and monetary policy should focus on reducing inflation.
Support young and low-skilled workers and accelerate state enterprise reforms are other of his recommendations.
In the medium and long term, the IMF considers essential “the investment in green energy, digitization and infrastructure “.
AFP
