Brazil & Southern Cone - 26 October 2004

'Inflation is falling, which is allowing us to move from a restrictive monetary policy to a more neutral one, which will allow a drop in interest rates,' was the positive appraisal of the economy given by the central bank president Julio de Brun this month. Uruguay's exports will grow 30% this year, according to the economy minister, Isaac Alfie. This should generate US$1bn more in revenue from overseas sales than it did last year. That amounts to some 8% of Uruguay's US$12.5bn GDP. However, economic growth of 10% this year (bear in mind the low base of comparison) will not be followed up next year. Higher oil prices mean that GDP growth is likely to be about 4.5% in 2005.

Outlook

GDP: The government forecasts the economy will expand 7% this year. Inflation: Annualised inflation will drop to 7% in 2005 from 9% this year, according to the central bank.
Unemployment: The open unemployment rate in June-August inched up by a third of a point to 13.6%, which is 2.4 points lower than a year earlier.