Uruguay's Strong Institutions and Stable Economy Allow It to Withstand Argentina's Economic Crisis

Uruguay's economy is strong with low inflation, a stable currency, and ability to cut interest rates, unlike crisis-hit Argentina.
Uruguay has built strong institutions and is less susceptible to shocks from Argentina compared to before.
Uruguay's peso is much stronger than Argentina's, with its reserves stable while Argentina's are negative.
Lower inflation allows Uruguay to cut rates to boost growth, while Argentina's soaring rates hinder its economy.
Uruguay seen as a regional example of how solid institutions can transform an economy.

reuters.com

Relevant topic timeline:

8/19/2023

Argentina in economic collapse as annual inflation hits 113%

### Summary Inflation in Argentina has reached 113%, pushing 40% of the population into poverty, as the country faces an economic collapse that could see the far-right return to power under Javier Milei, a rock-singing former sex coach who has threatened to abolish the central bank. ### Facts - 💸 Argentina is experiencing an economic collapse with annual inflation reaching 113%, its highest in over 30 years. - 💰 Inflation has pushed 40% of the population into poverty as soaring prices outpace wages. - 📉 The crisis escalated when the central bank raised interest rates to 118% to halt a sell-off in government bonds and the Argentine peso, which hit a record low against the dollar. - ⬇️ Inflationary pressures forced officials to devalue the peso by 18% on Monday, which some economists believe may fuel further inflation, possibly reaching 150%. - 🏛️ The far-right, led by Javier Milei, a rock-singing former sex coach, has gained popularity and threatens to abolish the central bank if they come to power. - 🌎 This serves as a stark contrast to the inflation battle faced by the Bank of England, where inflation stands at 6.8% and interest rates have been raised to 5.25%.

9/5/2023

Argentina should avoid dollarization as it can trap the country in Ecuador-like economic morass, one economist says

Argentina should avoid dollarizing its currency and learn from Ecuador's experience, as it could lead to a prolonged period of economic weakness, according to economist Robin Brooks.

9/18/2023

Canadian Business News Roundup: Clean Tech Funding in Limbo, Uruguay's Economy Grows Independent, Bank Closures and Job Cuts, Air Travel Complaint Backlog, Toronto Landlord's Electric Vehicle Ban Faces Legal Issues

Uruguay's central bank is thriving with low inflation, a strong currency, and a pivot towards interest rate easing, while Argentina's economy struggles, highlighting the diverging paths of the two neighboring countries.

10/7/2023

Argentine Barbershop Notebooks Document Soaring Inflation Over 30 Years

The handwritten notebooks of a Buenos Aires barber chronicle the devastating impact of Argentina's 19,900% inflation over several decades, with current President Alberto Fernandez overseeing the fastest price rises in the past 30 years, driving up poverty rates and causing a decline in purchasing power.

Topics

Posted 9/18/2023, 10:04:00 AM