The British magazine Euromoney delivered a report “providing a useful measure of relative risk for investors around the world,” according to which “Uruguay is the 18th safest country on the planet” and “the safest country” in Latin America to invest in. Uruguay’s risk score continued to improve during the first half of 2022 thanks to measurements taken from evolving political and economic indexes in addition to other metrics including “access to capital, a structural assessment, and debt ratings,” it added.
Uruguay’s risk score continued to improve during the first half of 2022 thanks to measurements taken from evolving political and economic indexes in addition to other metrics including “access to capital, a structural assessment, and debt ratings,” it added
”The president is also popular for the way his administration handled the pandemic and protected the economy,“ the report added. With economic winds having shifted, inflation has risen together with interest rates. The labor market needs revitalizing to reduce unemployment, tourism is slowly recovering, and new waves of covid-19 will test the economy and the healthcare system, Euromoney insisted. ”Lacalle Pou has shown a desire to tackle inflation“ and to seek ”trade agreements. He also wants to reform the social security system to ensure its long-term financial sustainability,“ the report went on while adding that tensions with Mercosur were significant as Brazil is going to the polls in a fortnight and Argentina next year. ”Uruguay has relatively high pension spending compared to other countries (around 10% of GDP). Half of this spending is financed by taxes and is expected to continue to increase in the coming years. Therefore, different players agree that reform is needed,“ local pollster Maria Ines Mailhos told Euromoney.
”Uruguay is certainly very attractive,“ while ”the survey scores for Brazil, Chile, Colombia, Mexico, and Peru have deteriorated this year, highlighting increased investor risk, along with the region’s riskiest options, Argentina and Venezuela, which rank 162nd and 167th, respectively, in Euromoney’s global risk rankings,“ the magazine explained. Uruguay ”has strong political parties and a stable and predictable macroeconomic framework. It is a well-functioning democracy with solid institutions. In the region, it stands out for its social and political stability,“ Mailhos argued. Nudel concurred: ”It is a combination of characteristics: political stability with good dialogue between parties, financial and fiscal solvency, social cohesion and democratic spirit, more attractive to foreign investors because of tax incentives.“
According to Euromoney ”there are always issues to address. Inflation and lower growth have been mentioned. This will put some pressure on fiscal targets for 2023 and 2024. Nudel also points to a somewhat new and increasingly important factor to monitor: urban insecurity.“
”However, Uruguay appears to be better positioned than most to meet these challenges. After all, it is the least risky Latin American country to invest in and does not appear to be about to lose that status any time soon,” the magazine concluded.
Source: El Pais