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Investor Presentaiton

1 Key Credit Highlights 17 Despite solid real GDP growth q/q in 2023Q1, business cycle indicators suggest decelerating economic activity in 2023, impacted by drought and lower external demand. 2 Steady improvement of public finances 2020, 2021, and 2022, delivering on fiscal targets; moderate widening of fiscal deficit in the first half of 2023, driven by cyclically softer tax revenues and public infrastructure investment. 3 4 5 6 In the context of a significant deceleration of inflation within the target band, Central Bank gradually started reducing short-term policy rate, while holding a contractionary monetary policy stance. Current account deficit is more than financed by FDI, amid real exchange rate appreciation and large international reserve buffers. The government forges ahead with structural and fiscally conservative reforms, including the recent social security reform law passed by Congress. Strengthening in the Government's balance sheet, through a reduction in the sovereign's debt and interest burdens and continued improvements in the currency and debt structure. 7 Uruguay becomes the top performer on ESG fundamentals among EM countries; string of recent rating upgrades and improvements in credit outlook by all five rating agencies, reflecting strong fundamentals and relatively low country risk.
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