Macroeconomic Forecast Uruguay

Unemployment in Uruguay continues to decline from the double-digit highs of recent years, last seen in May 2007. Coming down to 8.2% in February, the 12-month moving average unemployment rate in Uruguay has dipped below 9.0% for the first time in at least a decade. Going forward, we are projecting Uruguayan unemployment to continue to decline, currently forecasting 7.5% by the end of this year, and 7.1% by end-2009. Indeed, we expect the 12-month moving average unemployment rate to continue to trend downward over the next several years. We caution, however, that a tightening labour market could add additional pressure on an already worrying inflationary environment.

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