(Bloomberg) — Uruguay’s Yamandu Orsi was sworn in on Saturday for a five-year term, with the Latin America nation returning a left-wing government to office even as its neighbors shift to the right.
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In his first presidential speech, Orsi pledged to build on the legacies of his predecessors while reiterating campaign promises such as revitalizing the economy and reducing crime and child poverty.
“This isn’t the beginning of a re-foundational period, rather one of new proposals and permanent construction,” Orsi said in a televised address after taking the oath before Congress.
Orsi’s Broad Front party is back in power after successfully tapping voter angst to win last November’s runoff election. He pitched himself as the “safe change” candidate in contrast to other leaders who have roiled politics in the region, such as Argentine President Javier Milei.
The Broad Front enjoys a solid majority in the senate but needs the support of two opposition lawmakers in the lower house to pass its legislative agenda.
Orsi inherits an economy that is expected to grow 2.5% this year with unemployment below pre-Covid levels. The 57-year-old former governor promised to boost growth that averaged about 1.2% in the past decade through a mix of tax incentives and policies that promote agriculture, advanced technology and manufacturing. His most radical proposal would lower the minimum retirement age to 60 from 65 as part of a broader overhaul of the social security system.
Orsi and his economic team led by Gabriel Oddone will have to find funds to make good on a raft of expensive campaign promises while trimming a fiscal deficit that hit a worrisome 4.1% of gross domestic product in December. The five-year budget bill that goes to Congress in June will shed light on whether the new administration uses the tax-and-spend playbook of previous Broad Front governments.
Investors will also scrutinize Orsi’s commitment to price stability given that the Broad Front tolerated relatively high levels of inflation when it governed the country from 2005 to 2020. Inflation logged an unprecedented 20 months within the central bank’s 3% to 6% target in January thanks to tight monetary policy. However, long-term inflation expectations are stuck near the top of that range.
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