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                 L A T I N   A M E R I C A

          Friday, June 10, 2022, Vol. 23, No. 110

                           Headlines



A R G E N T I N A

PROVINCE OF MENDOZA: S&P Affirms 'CCC+' LT ICR, Outlook Stable


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Sargassum Affects Tourists Arriving
DOMINICAN REPUBLIC: Tops in Energy Losses


G U A T E M A L A

GUATEMALA: IMF Says Outlook Remains Favorable


P U E R T O   R I C O

JOG'S LLC: Files Chapter 11 Subchapter V Case


T R I N I D A D   A N D   T O B A G O

TRINIDAD & TOBAGO: Contractors Want Their Millions


U R U G U A Y

URUGUAY: Recovery Continues on Strong Footing, IMF Says

                           - - - - -


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A R G E N T I N A
=================

PROVINCE OF MENDOZA: S&P Affirms 'CCC+' LT ICR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' global scale issuer credit
and issue-level ratings on the province of Mendoza. The outlook
remains stable.

Outlook

S&P said, "The outlook on our ratings on Mendoza mirrors that on
the sovereign. Argentine authorities face challenges in
strengthening weak fundamentals and imbalances in the economy given
political disagreement on policy and limited room to maneuver ahead
of the 2023 election. The stable outlook also reflects the
renegotiation of an IMF program and access to official financing.
We also expect the province of Mendoza to maintain balanced results
after capital expenditures (capex) and its debt to continue
declining in the next 12 months."

Downside scenario

S&P said, "We could downgrade the province of Mendoza in the next
12 months if we downwardly revise our T&C assessment of Argentina
because of tighter foreign exchange restrictions amid scarce
reserves that could dent the local and regional governments' (LRGs)
ability to service debt. Finally, we could lower the long-term
ratings on the province if a sharply weaker-than-expected fiscal
performance or liquidity position increases the risk of default or
the likelihood of a distressed debt exchange in the next 12
months."

Upside scenario

S&P said, "While the province's intrinsic creditworthiness is
stronger than the current 'CCC+' ratings, we cap our ratings on the
province to those on Argentina (CCC+/Stable/C) and the 'CCC+' T&C
assessment. As a result, we could only upgrade Mendoza if we
upgrade Argentina and upwardly revise the T&C assessment."

Rationale

S&P said, "We revised upward the province's stand-alone credit
profile (SACP) to 'b-' from 'ccc+', reflecting our expectation that
the recently accumulated cash and continued commitment to fiscal
containment measures should enable Mendoza to cover its debt
service payments in 2022-2024. Debt service in U.S. dollars will
increase from $40 million in 2021-2022 to $125 million annually in
2023-2025, which our base-case scenario assumes to be manageable.
However, risks will stem from uncertainty in the province's
capacity to access sufficient foreign currency to bulk up needed
sums to service debt in U.S. dollars, as well as potential
macroeconomic instability that could strain its fiscal flows and
cash position. This is reflected in our T&C assessment and
sovereign rating cap on the ratings on Mendoza."

Better fiscal results should allow Mendoza to maintain recently
accumulated cash levels

S&P said, "We expect Mendoza to post operating surpluses averaging
9.5% of operating revenue in 2022-2024 and balanced results after
capex as the province's spending on infrastructure continues to
recover from the pandemic-related cuts in 2020. The economic
rebound last year and inflation boosted the province's revenue
collection, while spending remained under control. Mendoza posted a
surplus of 12.3% of operating revenue and after capex surplus of
5.4% of total revenue in 2021, which allowed for a recovery in cash
levels after the liquidity crunch in 2020.

"Our forecast assumes increases in Mendoza's own-source revenue and
transfers from the national government (57% of total revenue) to be
broadly in line with nominal GDP growth. We incorporate potential
pressures on operating spending, particularly payroll (50% of the
government's outlays) amid high inflation and given that
public-sector salaries haven't recovered in real terms since the
wage freeze in 2020. We believe that high inflation can lead to
volatility in fiscal performance. We also believe that Mendoza's
budgetary flexibility is limited due to a relatively rigid
operating spending structure, while increases in taxes are
unlikely."

The province has been receiving capital transfers from the national
government since October 2019 for a large hydroelectric dam
project, Portezuelo del Viento, which currently total about US$400
million (from a total US$1 billion). There's uncertainty on whether
the project will move forward--in which case Mendoza would solicit
using funds for other hydro or energy projects. Given that the
project's construction is financed through an account separate from
the provincial budget, S&P excludes these transfers from its fiscal
estimates and only consider any spending for the project that's
additional to these transfers.

S&P assumes international debt markets will remain closed to
Argentine LRGs, and Mendoza will cover funding needs with
pre-approved loans from multilateral lending agencies, as well as
with the financing from the national government. The province
currently doesn't have outstanding short-term notes, which could
also be a funding source in the future (up to 2.5% of the budgeted
revenues for the year of about ARP10 billion) and don't require
legislative approval.

Given limited access to credit markets, building cash buffers and
maintaining their value in real terms is a key challenge for
Argentine provinces. Improved fiscal performance allowed the
province to accumulate cash. Based on our estimates, Mendoza's free
and available cash should cover 80% of debt repayment for the next
12 months. Nevertheless, the ratio could fluctuate, given that
expected increases in infrastructure spending and because higher
debt service could dent cash accumulated in 2021.

The province's debt stock dropped to 46% of the province's
operating revenue in 2021 from 60% in 2020. About 63% of the debt
is denominated in U.S. dollars, which underscores potential
currency risk. Debt is also exposed to Argentina's high inflation,
given that 15% of Mendoza's debt is tied to inflation-linked
instruments. S&P expects the debt burden to diminish in coming
years and interest payments to below 5% of operating revenue,
largely because financing conditions remain limited. The province's
debt service profile will tick up in 2023 as payments for the 2029
international bond become heftier.

Argentina's sluggish economic growth and a weak institutional
framework constrain the rating on the province

S&P forecasts Mendoza's economy to remain feeble, in line with that
for the sovereign. Following a 10% rebound in Argentina's economic
growth, S&P expects it to slow to about 2% per year in 2022-2024.
Pronounced macroeconomic imbalances, a moderate pace of planned
fiscal consolidation, and volatile global economic conditions
underscore challenges in securing new deficit financing and smooth
rollovers in the small peso-debt market. Mendoza's socio-economic
indicators are in line with the national average, and according to
its estimates, the province's GDP per capita was $6,500 in 2021,
which was below the estimated national level of $10,700.

The provincial administration has a track record of pursuing
fiscally prudent policies, while it has maintained commitment to
lower tax pressure. At the same time, amid the increasingly
strained financial conditions, including very limited access to
external funding, the administration decided to prioritize
operating and capital spending over timely debt payment obligations
of its international bond in 2020, which was restructured.

Finally, S&P assesses the institutional framework for Argentina's
LRGs as very volatile and underfunded, reflecting its perception of
the sovereign's very weak institutional predictability and volatile
intergovernmental system that has been subject to various
modifications to fiscal regulations, and lack of consistency over
the years. This jeopardizes the LRGs' financial planning and
consequently their credit quality.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  Ratings List

  RATINGS AFFIRMED  

  MENDOZA (PROVINCE OF)

   Issuer Credit Rating       CCC+/Stable/--

  MENDOZA (PROVINCE OF)

   Senior Unsecured           CCC+

                                   TO     FROM
  MENDOZA (PROVINCE OF)

  Analytical Factors

   Stand-Alone Credit Profile      b-     ccc+




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D O M I N I C A N   R E P U B L I C
===================================

DOMINICAN REPUBLIC: Sargassum Affects Tourists Arriving
-------------------------------------------------------
Dominican Today reports that the phenomenon, which affects
Caribbean beaches, especially in summer, occurs when tourism in the
Dominican Republic is increasing considerably.

The Dominican Republic received 2.9 million tourists between
January and May, which doubles the 1.4 million that came to the
nation in the same period of the previous year, according to
Dominican Today.

A university in Boston in the United States has been working for
several years to develop a system for the effective management of
sargassum in the sea, the report notes.

The action seeks to avoid further damage to the beaches and coasts
that could be reflected in tourism, as published by the educational
institution from its Mechanical Engineering department, the report
relays.

The mission is carried out by the Massachusetts Institute of
Technology (MIT), Boston University number one in the world in
engineering, located in Cambridge, Massachusetts, the report
notes.

Ulises Jauregui, a doctor of technical sciences and coordinator of
the doctorate in environmental sciences at INTEC University,
assured that the integration of national and regional organizations
could contribute to dealing with the problem of sargassum coasts,
which he said is not only a problem of Dominican Republic, the
report relays.

"I think that to support and solve the problem there must be an
integration of national and regional organizations, to face this
problem," he said, the report discloses.

Jauregui said that with integrated management systems and
facilitating research, it would be possible to see the efficient
uses that could be given to the large volume of biomass from
sargassum, which he considered to be "very useful and have various
applications," the report says.

                About Dominican Republic

The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.

TCRLA reported in April 2019 that the Dominican Today related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."

An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.

Fitch Ratings, in December 2021, revised the Outlook on Dominican
Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR)
to Stable from Negative and affirmed the IDRs at 'BB-'.  The
revision of the Outlook to Stable reflects the narrowing of
Dominican Republic's government deficit and financing needs since
Fitch's last review resulting in the stabilization of the
government debt/GDP ratio, as well as the investment-driven
economic momentum, reflected in the faster-than-expected economic
recovery in 2021 that Fitch expects to carry into above-potential
GDP growth during 2022 and 2023.

Standard & Poor's, also in December 2021, revised its outlook on
the Dominican Republic to stable from negative.  S&P also affirmed
its 'BB-' long-term foreign and local currency sovereign credit
ratings and its 'B' short-term sovereign credit ratings.  The
stable outlook reflects S&P's expectation of continued favorable
GDP growth and policy continuity over the next 12 to 18 months that
will likely stabilize the government's debt burden, despite lack of
progress with broader tax reforms, S&P said.  A rapid economic
recovery from the downturn because of the pandemic should mitigate
external and fiscal risks.

Moody's affirmed the Dominican Republic's long-term issuer and
senior unsecured ratings at Ba3 and maintained the stable outlook
in March 2021.


DOMINICAN REPUBLIC: Tops in Energy Losses
-----------------------------------------
Dominican Today reports that not all the electricity that is
produced in the Dominican Republic is sold and invoiced.
Therefore, all electricity distribution companies generate losses
that can be technical or commercial, according to Dominican Today.
In both cases, the lost surplus poses a negative economic impact
for the Government, which must buy more energy to supply homes, the
report notes.

Although the Dominican Republic has managed to reduce energy losses
by approximately 3.4% per year, it continues to lead electricity
loss statistics compared to four countries with similar data,
according to the Energy Monitor of the Ministry of Economy,
Planning and Development (MEPyD) corresponding to last April, but
recently published, the report relays.

One part of the energy produced by power companies is distributed
in the National Interconnected Electric System (SENI), another part
is used to keep distribution equipment and software in proper
working order, and a percentage is lost in the marketing process
due to lack of storage, the report adds.

                  About Dominican Republic

The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.

TCRLA reported in April 2019 that the Dominican Today related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."

An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.

Fitch Ratings, in December 2021, revised the Outlook on Dominican
Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR)
to Stable from Negative and affirmed the IDRs at 'BB-'.  The
revision of the Outlook to Stable reflects the narrowing of
Dominican Republic's government deficit and financing needs since
Fitch's last review resulting in the stabilization of the
government debt/GDP ratio, as well as the investment-driven
economic momentum, reflected in the faster-than-expected economic
recovery in 2021 that Fitch expects to carry into above-potential
GDP growth during 2022 and 2023.

Standard & Poor's, also in December 2021, revised its outlook on
the Dominican Republic to stable from negative.  S&P also affirmed
its 'BB-' long-term foreign and local currency sovereign credit
ratings and its 'B' short-term sovereign credit ratings.  The
stable outlook reflects S&P's expectation of continued favorable
GDP growth and policy continuity over the next 12 to 18 months that
will likely stabilize the government's debt burden, despite lack of
progress with broader tax reforms, S&P said.  A rapid economic
recovery from the downturn because of the pandemic should mitigate
external and fiscal risks.

Moody's affirmed the Dominican Republic's long-term issuer and
senior unsecured ratings at Ba3 and maintained the stable outlook
in March 2021.




=================
G U A T E M A L A
=================

GUATEMALA: IMF Says Outlook Remains Favorable
---------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
concluded the Article IV consultation [1] with Guatemala [2] on
June 6, 2022 and considered and endorsed the staff appraisal
without a meeting on a lapse-of-time basis.

The remarkable resilience of the Guatemalan economy during the
pandemic has almost returned the level of GDP to its pre-pandemic
projected trend, in response to an unprecedented level of policy
support, an early reopening of the economy, and a favorable
external environment, including from strong remittances. Growth
rebounded strongly to 8 percent in 2021, while inflationary
pressures were contained, as temporary pandemic and climate-related
factors in 2020 faded rapidly. The primary fiscal balance moved
into surplus in 2021 largely due to better-than-expected tax
revenues (including significant tax administration gains). The
current account surplus declined to 2.5 percent of GDP in 2021, as
continued strength in remittances was more than offset by a
substantial increase in imports and weaker terms of trade. The
banking sector remains solid overall with pandemic-related measures
appropriately phased out last year. Despite the economy's
resilience, social indicators likely deteriorated during the
pandemic and longstanding infrastructure and social gaps remain.

The outlook remains favorable. Growth is projected at 4 percent in
2022 supported by a still favorable policy mix, a recovery of
lagging sectors, favorable credit conditions, and the resilience of
the U.S. economy spurring robust remittances. Thereafter, growth is
projected to stabilize at its pre-COVID potential rate of 3 1/2
percent by 2023. Driven by external price pressures, inflation is
projected to increase but remain within the target band (4 ± 1
percent), averaging 4.4 percent in 2022. The current account is
projected to move into deficit (around ½ percent of GDP) in GDP in
response to higher import prices and slower growth in remittances.

Risks to growth remain tilted to the downside. The Guatemalan
economy faces a highly uncertain external outlook, including from
the war in Ukraine. De-anchoring of inflation expectations in
advanced economies, continued global supply chain disruptions, and
potential changes to investor risk sentiment could all lead to an
abrupt tightening of global financial conditions. Elevated and
volatile commodity prices introduce additional uncertainty and
could accelerate global inflationary pressures and slowdown
external demand. Social discontent could be triggered by rising
food and energy prices affecting the most vulnerable.


Executive Board Assessment

The Guatemalan economy was remarkably resilient during the pandemic
and the near-term outlook is favorable, but long-standing social
and infrastructure gaps remain. Underpinned by a favorable external
environment and the authorities' swift, comprehensive, and
coordinated policy response in 2020 that laid the foundations for a
strong recovery. Real GDP grew 8 percent in 2021 and is projected
to grow around 4 percent in 2022 and then converge to its potential
rate of 3½ percent. While inflationary pressures were mostly
contained in 2021, inflation is projected to rise in 2022 in line
with global inflationary pressures but should remain within
Banguat's inflation target range. The external position remains
stronger than the level implied by medium-term fundamentals and
desirable policies, but the gap is expected to narrow. Despite such
resilience, social indicators likely deteriorated during the
pandemic and longstanding infrastructure and social gaps persist.

With a well-entrenched recovery, near-term policies need to be
carefully calibrated to sustain economic momentum but remain agile
to evolving macroeconomic and social conditions. The fiscal stance
in 2022-including the temporary measures announced to mitigate the
impact of higher import prices and the increase in the
infrastructure budget-are appropriate. If economic conditions
worsen, authorities should consider temporarily re-deploying some
of the targeted 2020 social measures. Monetary policy normalization
must be carefully calibrated amid tighter global financial
conditions, and remain data driven to maintain inflation
expectations anchored. A clear and consistent communication
strategy will help guide market expectations, while greater
exchange rate flexibility can also help absorb external shocks. The
SIB should continue to closely monitor nonperforming loans and any
potential financial stability risks, including those stemming from
tighter global financial conditions.

Accelerating efforts to address long-standing social gaps is
crucial while maintaining fiscal sustainability. Increasing tax
revenues further and improving spending efficiency to create fiscal
space is necessary to close these gaps. In that regard, SAT should
build upon recent tax administration improvements. On the spending
side, reforms should focus on increasing budget flexibility,
bolstering the cost-effectiveness of procurement, improving the
coverage and quality of public services, and rationalizing tax
incentives and exemptions. Authorities could further strengthen
their long-term strategic infrastructure vision with a focus on
projects with highest inclusive growth potential. To support these
efforts, while maintaining the long-standing and very prudent
fiscal policy in Guatemala, additional upgrades to its medium-term
fiscal framework could be explored such as on multi-annual budget
planning and the formalization of an explicit fiscal anchor.

The government rightly aims to enhance the business climate and
promote investment opportunities to boost economic growth. The
passage of the law to facilitate insolvency procedures should
promote firm creation. The recently introduced Construction Single
Window, which eases the issuance of construction licenses, and the
government's efforts to boost affordable housing and streamlining
the PPP framework to expedite key identified infrastructure
projects, should bolster private investment. Formalizing part-time
work could further help lift formalization. In addition, staff
encourage authorities to expedite the implementation of the
2020-2024 General Policy of the Government, and the Guatemala No Se
Detiene Plan to improve the business climate, and security. On the
governance and anti-corruption fronts, reforms improving the
judiciary and legislative environment, including strengthening the
Attorney General's Office, remain important. In that regard,
broad-based transparency and digitalization efforts undertaken
across the public administration are welcomed. A results-based
approach could help ensure these and other efforts fully translate
into sustainable and concrete outcomes for all Guatemalans.

The banking system remains sound, but reforms to improve the
supervisory and regulatory framework should be expedited. The
Banking and Financial Groups and AML/CFT laws, which align
regulations with Basel III and FATF standards respectively, are
pending Congress approval. Staff encourage the speedy
implementation of the legal framework for Fintech and e-money,
which is well underway, and welcome the adoption of the new
Securities Market Law, which will support the development of
financial markets while strengthening the supervisory and
regulatory framework.




=====================
P U E R T O   R I C O
=====================

JOG'S LLC: Files Chapter 11 Subchapter V Case
---------------------------------------------
JOG'S LLC filed a petition under the provisions of Subchapter V of
Chapter 11 of the Bankruptcy Code in Puerto Rico.

According to court filings, JOG's LLC estimates between 1 and 49
unsecured creditors. The petition states funds will be available to
unsecured creditors.

A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for June 27, 2022 at 3:30 P.M.

                           About JOG'S LLC

JOG'S LLC, doing business as Panaderia Jogs and Coffee Shop, is a
breakfast and brunch restaurant.

JOG'S LLC sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D.P.R. Case No. 22-01525) on May 27, 2022.  In the
petition signed by Yamilka J. Gonzalez Torres, as president, listed
estimated assets and liabilities between $50,000 and $100,000
each.

Carmen D Conde Torres, of C. Conde & Associates, is the Debtor's
counsel.

Carlos G Garcia Miranda is the Subchapter V trustee.




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T R I N I D A D   A N D   T O B A G O
=====================================

TRINIDAD & TOBAGO: Contractors Want Their Millions
--------------------------------------------------
Elizabeth William at Trinidad Express reports that contractors in
Tobago, who are owed millions of dollars from the Tobago House of
Assembly (THA), had a meeting with Chief Secretary Farley Augustine
and Division of Infrastructure Secretary Trevor James.

The meeting was held at the Division of Finance headquarters in
Scarborough.

This was confirmed by one contractor who spoke to the Express
following the meeting.

"It was a cordial meeting. The Chief Secretary basically stated
their position from the assembly standpoint but he also gave the
commitment that he recognized work was done and because work was
done they would have to find some way to also compensate for the
work that was done," said Janet Parks, CEO of Parks International
Ltd, according to Trinidad Express.

No cheques were distributed to contractors, but they are holding
the Chief Secretary to his word, the report notes.

"I think it was fruitful we are going to hold him to that and he
basically gave a commitment to go back on the drawing board to see
where they can get funds to pay us a percentage for starters, but
certainly they have given us the commitment that before the end of
June they would be giving us a first payment and quarterly payment
thereafter. Certainly as contractors this is something very
positive for us because we have been waiting for over six months
without any formal word, some longer than six months," Parks said,
the report relays.

The businesswoman said her company is owed a substantial amount of
funds, rolled over from the previous administration, the report
relays.

"It is a significant sum in the millions, significant in terms of
value of works because we were engaged in quite a lot of jobs as a
matter of fact all of us who met were basically in the same boat,
because we were contacted to work on several projects. I know for
us, Parks International, most of our projects have been completed
and handed over, so it is a situation where we have been waiting to
be paid," she said, the report notes.

Parks said her budget wish is, "In terms of the revenues that are
coming into Tobago I would like to see them better allocated and
better utilised. As business people would want to be paid promptly
because it is a big domino effect when the government applies all
these penalties on your VAT and your NIS and so on and if they in
turn are not paying us in a timely manner it really is unfair to us
to be able to carry that burden," the report relays.

An announcement on budget day is expected soon, the report adds.




=============
U R U G U A Y
=============

URUGUAY: Recovery Continues on Strong Footing, IMF Says
-------------------------------------------------------
An International Monetary Fund (IMF) mission led by Gustavo Adler
visited Montevideo, Uruguay during May 30-June 3, 2022, to discuss
with the Uruguayan authorities recent economic developments,
including the recovery from the pandemic, the impact of the war in
Ukraine, and the country's policy priorities. At the conclusion of
the visit, Mr. Adler issued the following statement:

The recovery from the pandemic continues on a strong footing. After
growing 4.4 percent in 2021, Uruguay's GDP reached pre-pandemic
levels in late 2021 and is poised to continue growing at a firm
pace in 2022 on the back of strong meat and grain exports and
recovering service sectors. While the war in Ukraine has
exacerbated global uncertainty, its impact on the Uruguayan economy
is expected to be limited as direct trade with Russia and Ukraine
is low, and the drag on the Uruguayan economy from high oil prices
is expected to be more than offset by the expansionary effects of
high agricultural commodity prices. However, potential disruptions
in global fertilizers' markets and a marked deceleration of global
growth-amid high energy costs, tightening global financial
conditions and COVID-related dislocations-are key short-term risks
to Uruguay's growth.

Inflation has drifted further away from the target range in recent
months, driven both by external inflationary pressures related to
the global food and energy shock and domestic factors. With price
pressures broadening beyond food and energy items, and inflation
expectations remaining above the target range, inflation is
expected to exceed the central bank's target range for some time.

Following the gradual withdrawal of monetary policy stimulus since
mid-2021, the latest interest rate hikes have turned monetary
policy moderately contractionary. Further monetary tightening will
be key to re-anchor inflation expectations, continue strengthening
central bank credibility and durably reining in inflation over the
monetary policy horizon.

The authorities' intentions to continue with prudent fiscal policy
to rebuild buffers that would allow to address future shocks, along
well-targeted temporary measures to mitigate the impact of the
inflationary shock and the pandemic on the most vulnerable, are
welcome. Progress made in recent months on the fiscal framework,
including the implementation of the Fiscal Council, is
commendable.

The authorities' intention to reform the pension system and pursue
improvements in education are welcome, as these changes are key to
boost medium-term growth, safeguard fiscal sustainability and
ensure inter-generational equity and social cohesion.
The IMF mission thanks the authorities for their kind hospitality
and fruitful discussions and looks forward to further interactions
in the context of the upcoming Article IV annual consultation,
planned for late 2022.



                           *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Latin America is a daily newsletter
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