Stability alone does not buy a house: Georgieva's message in Montevideo

Friday, July 31st 2026 - 08:02 UTC Stability cannot be put in a refrigerator, she said, and a house cannot be bought on stability alone: more growth is genuinely needed International Monetary Fund Managing Director Kristalina Georgieva praised Uruguay's macroeconomic and institutional strength on Thursday but urged authorities to take greater risks to turn that stability into growth. Stability cannot be put in a refrigerator, she said, and a house cannot be bought on stability alone: more growth is genuinely needed. She was speaking at the annual economics conference organized by the Central Bank of Uruguay. In closing, she called for protecting what has been achieved while adding a little more courage to face the new international environment. Georgieva highlighted the social consensus underpinning Uruguayan policy and described it as an asset in an increasingly polarized world. She noted that the country holds public debt of around 60% of gross domestic product and an electricity matrix that is 98% renewable. Among areas with potential she identified logistics capacity to serve neighboring countries, greater cost efficiency in public services, simplified procedures for small and medium-sized enterprises, and preparing society for the impact of artificial intelligence. On monetary policy, she welcomed the reduction of inflation to 4.5% and the anchoring of expectations, but advised against rushing to set a lower target while external shocks persist, particularly on energy prices. She also backed the central bank's de-dollarization strategy, arguing that wider use of the national currency strengthens the capacity to respond to shocks the country cannot control, and recommended encouraging peso savings through better returns. Central bank Governor Guillermo Tolosa had warned on Wednesday that Uruguayans' financial decisions remain shaped by fear inherited from the 2002 crisis. Georgieva compared that behavior with the experience of Bulgaria, her home country. Turning to the global context, the IMF chief described a transition from a predictable order toward a system with multiple centers of gravity, and warned that protectionism and trade fragmentation could cut as much as 7% of world output. The fund projects global inflation of 4.7% this year and holds that a resurgence would raise debt servicing costs. She cited the conflict in the Middle East and tensions in the Strait of Hormuz among sources of vulnerability. On artificial intelligence, she estimated it could add up to 0.8 percentage points to annual global growth, while affecting 40% of jobs worldwide and as much as 60% in advanced economies. Georgieva said Latin America has a unique opportunity to realize its potential through greater regional integration. Economy Minister Gabriel Oddone described the visit as a political one.