Itaú BBA - Macro Scenario – Uruguay: The government aims to reduce the fiscal deficit and inflation

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Macro Scenario – Uruguay: The government aims to reduce the fiscal deficit and inflation

September 9, 2020

The budget bill foresees a reduction of the consolidated fiscal deficit to 3.8% of GDP in 2021.

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

The budget bill foresees a reduction of the consolidated deficit to 3.8% of GDP in 2021. For this year we estimate a deficit of 6.5% of GDP (vs. 7% in our previous scenario). The government aims to reduce the deficit to 2.5% of GDP by 2024 and has defined a structural deficit metric and a fiscal rule.

The central bank will use the overnight rate as the monetary policy rate, to be set at 4.5%, in line with its commitment to provide liquidity to the financial system. The central bank also announced the reduction of the inflation target range to 3%-6% in September 2022, from the current 3% -7%.

Juan Carlos Barboza
Diego Ciongo ​​​​

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



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