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LatinNews Daily - 07 October 2021

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In brief: IMF Article IV Mission praises Uruguay

* The International Monetary Fund (IMF) has released the Staff Concluding Statement of the Fund’s 2021 Article IV Mission to Uruguay, in which it is praised for its response to the coronavirus (Covid-19) pandemic. The mission praises the authorities for their prudent macroeconomic management of the crisis and encourages them to press ahead with their reform agenda as the pandemic is overcome”, the IMF statement concludes. While noting that the pandemic did exacerbate existing structural imbalances and that the economic recovery in early 2021 was uneven, the IMF says that recovery is expected to strengthen at the end of this year and into 2022, aided by the resumption of tourism. A “rapid vaccination campaign” - with 77% of the population fully vaccinated against Covid-19 - has also helped. Suggested reforms to pursue include a pension reform, “policies to foster employment and address skill mismatches in the labour force”, and a deeper reform to state-owned enterprises to improve their efficiency and profitability. The IMF now expects Uruguay’s GDP to grow 3.4% this year and 3.2% in 2022, with inflation forecast to close 7.2% this year and fall to 5.8% by end-2022.