Uruguay: Selected Issues

International Monetary Fund

No 2013/109, IMF Staff Country Reports from International Monetary Fund

Abstract: Uruguay’s inflation and inflation expectations exceed the inflation target, and the gap has been widening in recent years. To help bring it to the mid-point of the target, Banco Central del Uruguay (BCU) needs to maintain a tightening bias in addition to strengthening its communication. This paper examined the factors behind the composition of FDI flows to Uruguay and suggested that strong institutions and macroeconomic stability have helped attract FDI to the secondary and tertiary sectors. Flexibility of the labor market, financial deepening, and the quality of infrastructure can further this improvement.

Keywords: ISCR; CR; inflation expectation; Uruguay; FDI flow; inflation dynamics; FDI allocation; FDI decision; Inflation; Foreign direct investment; Inflation targeting; Consumer price indexes; Central bank policy rate; Global; Africa; Europe (search for similar items in EconPapers)
Pages: 38
Date: 2013-05-08
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