Macroeconomic Forecast Uruguay

BMI View: Uruguay's consumer price inflation came in at 8.1% y-o-y in January, down from 8.6% a month earlier. We believe the Uruguayan central bank has now completed the hiking cycle it begun in September 2010 and will therefore hold rates at 8.75% through 2012. As the effects of the rate hikes gradually feed through the real economy, we expect inflation to decline further in coming quarters, reaching 7.0% y-o-y by the end of 2012.

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