MONTEVIDEO, Oct 4 (Reuters) - The International Monetary Fund raised its 2013 economic growth forecast for Uruguay on Friday, but lowered its estimates for 2014, saying growth had “moderated to a more sustainable pace” after a decade of strong expansion.
Citing robust domestic demand, strong foreign direct investment and an expected improvement in demand from abroad, the IMF expects Uruguay’s economy to grow 4 percent in 2013 according to a statement released on Friday, up from a previous estimate of 3.8 percent in May.
Growth should reach “about 3.5 percent” in 2014 and 2015, the IMF said, down from a prior estimate of 4 percent for next year.
Uruguay’s gross domestic product grew 3.9 percent in 2012, completing a full decade without a single year of economic contraction.
The IMF cited persistent inflation pressure and strong increases in labor costs as key risks for the Uruguayan economy, and called for tighter fiscal policy and more infrastructure investment as a way to maintain robust economic growth.