Uruguay's economy expanded 6.5% in 2006 said President Tabare Vazquez according to a draft copy from his state of the nation speech to be delivered March first. This is half a point less than the 7% originally estimated.
"GDP in 2006 increased 6.5% which means it now stands at 19.5 billion US dollars", says the report. Earlier in the year Economy minister Danilo Astori had forecasted that the Uruguayan economy would expand 7% in 2006. For this year the forecast is 4.5%. Saddled on bullish prices for commodities the Uruguayan economy has been growing for the last four years following the 2001/2001 financial crisis, a spill over from Argentina's default and recession, the worst in over half a century. Exports last year marked a new record, 3.9 billion US dollars but so did imports totaling 4.8 billion US dollars, which turned into the highest trade deficit in the last five years equivalent to 823 million US dollars. The figure is double the 2005 trade deficit and the highest since the one billion US dollars of 2001, when Uruguay was still under the full negative impact of Brazil's unexpected, unanticipated devaluation of January 1999. At the time Brazil was Uruguay's main trade partner followed by Argentina. In 2006 imports jumped 23% and exports 15.7%. The energy bill (Uruguay has no hydrocarbons resources) together with increases in consumer goods and capital goods imports signaled a new record. Uruguay's deficit is concentrated in Mercosur members: 777 million US dollars with Argentina; 521 million with Venezuela (mainly oil) and 495 million with Brazil. .