MercoPress. South Atlantic News Agency

Uruguay's economy expanded 8.9% in 2008 but 0.8% in 4Q

Boosted by international and domestic demand Uruguay’s economy expanded for the sixth year running having recorded last year, 8.9%, according Central Bank president Mario Bergara.

However since the Uruguayan economy slowed down to 0.8% in the last quarter compared to the previous quarter, opposition economists argue that recession is “round the corner”, while government officials indicate that Uruguay “is resisting quite well the impact of the international crisis”.

“The fact is that GDP in the last quarter has grown, albeit 0.8%. We will be facing a significant slowdown because of the previous very high growth rates”, said Bergara who added that 2009 private forecasts range between 0% and 3%, “but nobody is anticipating a strong fall of GDP”.

Bergara insisted that the good showing of 2008 ensures a floor expansion of 2.4% for 2009, and the last quarter “in the context of what happened worldwide can be considered among the best performances compared to Latinamerican countries and developed economies”.

In the fourth quarter of last year Brazil and United States, both important trade partners of Uruguay suffered GDP contractions. “Uruguay on the other expanded 7.6% over the same period in 2007”.

However there are concerns because several crucial sectors of the Uruguayan economy showed significant contractions during the last quarter: manufacturing was down -3.9%; agriculture, -3.1%; retail, -2.1% and construction, -0.3%.