Modest Uruguay optimism will not relieve disillusion

Significance

GDP expanded by 1.5% in 2016 and early data for 2017 are promising. However, the government has suffered an unprecedented fall in public opinion. The Frente Amplio (FA), in power since 2005, has also lost its Lower House majority. The coalition must seek approval of the 2018-20 budget amid internal tensions that reduce its room for manoeuvre.

Impacts

• The government will have great difficulty in reversing growing public disillusion.
• Growth will not affect unemployment and policy concerns.
• Nevertheless, the opposition will struggle to capitalise on discontent.