MONTEVIDEO, Feb 10 (Reuters) - Uruguayan lawmakers on Tuesday approved raising the country’ debt ceiling by 65 percent to allow increased public investment even though the leftist government is grappling with a growing fiscal deficit.
The cattle-producing nation’s fiscal deficit hit an above-target 3.5 percent in 2014 and was a central theme in November’s presidential vote, with the defeated centre-right candidate campaigning on a mandate to shave off 1.5 percentage points. The deficit came in at 2.3 percent in 2013.
Lawmakers voted in favour of hiking the cap to an equivalent of roughly $1.09 billion from its previous ceiling of $660 million, with the measure retroactive to Jan. 1, 2014.
Economy Minister Mario Bergara said the move was necessary because “the international outlook continues to show risks and uncertainties.”
Uruguay’s leftist coalition delivered a decade of strong growth, averaging 5.7 percent between 2005-2013. But the government expect to report growth of about 3 percent in 2014 as neighbouring Argentina and Brazil teeter on the brink of recession. (Reporting by Esteban Farat; Writing by Richard Lough; Editing by Lisa Shumaker)