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Subject
Uruguay's economic outlook.
Significance
The government has determined a fiscal adjustment, with tax increases for middle- and high-income earners, delays in public spending plans and a reform of military pensions, in a bid to address worsening public finances. It is the first time that the leftist Frente Amplio (FA), in government since 2005, has faced an adverse economic climate.
Impacts
Austerity in a context of 'stagflation' will generate political and trade union tensions.
Rising unemployment will drive a deterioration in real family incomes.
Growth will remain paltry this year and next.
Keywords:
Uruguay,
LA/C,
economy,
industry,
politics,
consumer,
debt,
employment,
fiscal,
foreign trade,
government,
growth,
legislation,
manufacturing,
opposition,
party,
policy,
prices,
unions,
wages
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2016
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