Uruguay Economic Forecast

Uruguay Economic Outlook

September 12, 2018

In the run-up to the release of this month’s second-quarter national accounts report, growth is expected to have picked up the pace from the unexpectedly strong outturn at the beginning of the year. Fixed investment, which improved markedly in the first quarter, looks set to have finally rebounded in the second quarter amid tighter industrial capacity and the government’s ambitious spending plans. Household spending, on the other hand, appears to have come up short; higher inflation and tight lending conditions likely blunted gains from the steady downtick in unemployment. Meanwhile, exports have plummeted in recent months; with both the Argentine peso and the Brazilian real in freefall, Uruguay’s wares have become increasingly expensive for its key trading partners. In early September, in an effort to stave off the deepening economic crisis in neighboring Argentina, the government introduced a modest set of controls intended to shield the external sector from spillover effects of the turmoil.

Uruguay Economic Growth

Domestic demand is expected to recover this year on the anticipated rebound in fixed investment, which should get a boost from the government’s ambitious spending plans, and robust private consumption. That said, external risks will continue to put pressure on exports as Argentina and Brazil flounder. Fiscal slippage remains a substantial risk heading into next year’s vote, although new revenue could see the deficit narrow over the medium term. Met the why particular panelists expect growth of 2.5% in 2018, down 0.1 percentage points from last month’s forecast, and 2.6% in 2019.

Uruguay Economy Data

20132014201520162017
Population (million)3.43.53.53.53.5
GDP per capita (USD)16,86016,79215,57514,94317,177
GDP (USD bn)57.557.253.352.460.0
Economic Growth (GDP, annual variation in %)4.63.20.41.52.7
Consumption (annual variation in %)5.53.0-0.50.14.4
Investment (annual variation in %)3.82.4-9.2-1.6-15.5
Industrial Production (annual variation in %)4.11.13.10.3-11.1
Unemployment Rate6.56.67.57.97.9
Fiscal Balance (% of GDP)-2.3-3.5-3.6-3.9-3.5
Public Debt (% of GDP)57.558.658.963.664.5
Money (annual variation in %)15.03.75.68.415.0
Inflation Rate (CPI, annual variation in %, eop)8.58.39.48.16.6
Inflation Rate (CPI, annual variation in %)8.68.98.79.66.2
Inflation (PPI, annual variation in %)11.66.6-1.95.4-  
Benchmark Interest Rate (%)7.357.176.946.585.56
Exchange Rate (vs USD)21.1324.3729.9129.3328.83
Exchange Rate (vs USD, aop)20.4123.2127.3130.1428.66
Current Account (% of GDP)-3.4-3.1-0.80.81.5
Current Account Balance (USD bn)-2.0-1.8-0.40.40.9
Trade Balance (USD billion)1.81.61.20.60.0
Exports (USD billion)9.19.17.77.07.9
Imports (USD billion)11.911.88.97.67.9
Exports (annual variation in %)4.10.7-15.9-8.912.7
Imports (annual variation in %)-1.2-1.2-17.4-14.03.5
International Reserves (USD)16.317.815.613.416.0
External Debt (% of GDP)65.070.480.276.664.5

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Uruguay Facts

ValueChangeDate
Exchange Rate32.800.24 %Sep 24

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