Revised Forecasts Boost Rating

Uruguay's short-term economic risk rating has jumped to 67.7 from 63.5 this month as we have revised up our economic growth forecasts and revisited the country's international reserves position. Now forecasting real GDP growth to remain above 5.0% over the next two years on the back of 7.4% growth in 2007, Uruguay's growth rating rose to 73.3 from 70.0. Moreover, with import cover expected to average 8.5 months over 2008 and 2009, the short-term external category has been boosted to 60.0 from 46.7. The significant increase in this category, in particular, reflects our outlook for an improving international reserve position for the country going forward. This should be supportive of prospective external debt reprofiling in the medium term, and could lead to an increase in Uruguay's credit rating going forward.

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