MercoPress. South Atlantic News Agency

Strong expansion of the Uruguayan economy.

Uruguay's GDP expanded 2,5% in 2003, after contracting 11% in 2002. This is the first time since 1998 that the Uruguayan economy shows positive growth according to the latest release from the Uruguayan Central Bank.

Following the collapse of the Argentine economy that began in 2000, neighbouring Uruguay was exposed to strong turbulences with its economy contracting a record 17,7% between 1999 and 2002.

However in the second half of 2003 economic activity rebounded and managed a 7,5% expansion in the third quarter compared to the same period in 2002. The fourth quarter grew at an astonishing 15,8% helping to make 2003 a positive year.

Uruguay's GDP in 2003 reached 11,1 billion US dollars with a per capita income equivalent to 3,307 US dollars.

Agriculture proved the locomotive of the recovery in 2003 with a 14,4% growth pushed by excellent crops of rice, wheat, barley and soybeans plus advantageous international prices.

Industry's performance was 4,6% evenly distributed among the main sectors, food, beverage, textiles and chemicals. Exports pushed by foreign demand were the most dynamic sectors of the economy, with domestic demand lagging until the last quarter of 2003.

The expansion between the fourth and third Qs of 2003 was 3%, meaning the Uruguayan economy managed an average 3,6% per quarter, which should have a positive inertial impact this year, in spite of the fact that general elections will be held next October.

The first quarter of 2004 expanded 16% compared to a year ago, and 2,5% over the fourth Q of 2003. Growth estimates for the whole year range between 4,5 and 9%. The Central Bank is forecasting 5%.