(Reuters) - Uruguay's government will raise its 2011 economic growth forecast from the current 4.5 percent, Vice President Danilo Astori told the Reuters Latin America Investment Summit on Wednesday.
The South American country's economy is expanding for an eighth straight year, buoyed by high commodity prices.
"Without a doubt, the government will have to update its prediction on the upside," Astori, an influential economic policy voice in the leftist government of President Jose Mujica, said in Montevideo.
Uruguay's economy grew by 8.5 percent last year.
Last week, Uruguay's central bank raised its benchmark lending rate 100 basis points to 7.5 percent in an unexpectedly bold move aimed at taming inflation. Annual inflation was 7.67 percent through February, above the central bank's target range of 4 percent to 6 percent by year-end.
Astori said policymakers are ready to keep taking steps aimed at keeping consumer prices from rising too fast. "The government is ready to take more measures, if necessary," he said.
The South American country does not plan to change its inflation target, the vice president added.
"We are worried that we are out of the target range ... We want to meet the target because it is a commitment," Astori said. "We do not plan to modify the target range on the upside."
The government's intervention in the foreign exchange market will continue as it attempts to control the strength of the local currency, Astori said.
"The buying and selling of foreign exchange, which the government is doing more of, will continue to play an important role," he said.
The Uruguayan peso strengthened to a nine-month high of 19.2 per U.S. dollar on Wednesday, up 4.4 percent so far this year against the greenback.
Source: www.reuters.com
The South American country's economy is expanding for an eighth straight year, buoyed by high commodity prices.
"Without a doubt, the government will have to update its prediction on the upside," Astori, an influential economic policy voice in the leftist government of President Jose Mujica, said in Montevideo.
Uruguay's economy grew by 8.5 percent last year.
Last week, Uruguay's central bank raised its benchmark lending rate 100 basis points to 7.5 percent in an unexpectedly bold move aimed at taming inflation. Annual inflation was 7.67 percent through February, above the central bank's target range of 4 percent to 6 percent by year-end.
Astori said policymakers are ready to keep taking steps aimed at keeping consumer prices from rising too fast. "The government is ready to take more measures, if necessary," he said.
The South American country does not plan to change its inflation target, the vice president added.
"We are worried that we are out of the target range ... We want to meet the target because it is a commitment," Astori said. "We do not plan to modify the target range on the upside."
The government's intervention in the foreign exchange market will continue as it attempts to control the strength of the local currency, Astori said.
"The buying and selling of foreign exchange, which the government is doing more of, will continue to play an important role," he said.
The Uruguayan peso strengthened to a nine-month high of 19.2 per U.S. dollar on Wednesday, up 4.4 percent so far this year against the greenback.
Source: www.reuters.com
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