Itaú BBA - Macro Scenario – Uruguay: Inflation expectations decrease

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Macro Scenario – Uruguay: Inflation expectations decrease

October 6, 2020

We maintain our inflation forecast for this year of 9.5%.

For the version with all charts and tables, please open the attached pdf file

Annual inflation remained below double digits in September, helped by exchange-rate stability and the weakness of the labor market due to lower activity. We maintain our inflation forecast for this year of 9.5%.

The central bank kept the monetary policy rate unchanged, at 4.5%, and confirmed that it will gradually move towards a contractionary position as activity and inflation conditions allow. We expect the monetary policy rate to end the year at 5.5%.

Activity fell sharply in 2Q20 due to the contraction of consumption. We expect a 4.0% drop in GDP in 2020, with a gradual recovery in activity in the remainder of the year.

Juan Carlos Barboza
Diego Ciongo


For the version with all charts and tables, please open the attached pdf file



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