Uruguay Economic Forecast

Uruguay Economic Outlook

July 11, 2018

The economy shifted into a slightly higher gear at the outset of the year, but growth nevertheless remained subdued. Q1’s reading was driven by strong, albeit decelerating, private consumption, which cooled in Q1 against the backdrop of intensifying inflationary pressures and higher unemployment. Meanwhile, fixed investment continued to contract in Q1, led by lower private investment in the mining sector, yet the reading improved considerably from Q4, signaling a possible rebound in investment activity in the coming quarters. On the external front, exports grew at a solid pace in annual terms in Q1 on the back of robust external demand, offsetting an increase in imports, as higher inflation and a weaker peso likely weighed down on the consumer demand.

Uruguay Economic Growth

Growth is seen gaining steam in the coming quarters thanks to solid domestic demand, on the back of a rebound in fixed investment and sustained consumption growth. The manufacturing sector will continue to benefit from the reopening of the state-owned oil refinery, nevertheless, the activity gains are at risk of being offset by shrinking agricultural output due to weather-related factors. The economy remains somewhat vulnerable to external shocks, in particularly relating to an ongoing economic turmoil in Argentina. Our panelists expect GDP to expand 2.7% in 2018, which is 0.2 percentage points down from last month’s forecast, and 2.8% 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 Rate31.300.24 %Jul 17

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