MercoPress. South Atlantic News Agency

Uruguayan economy expands 9.8% in first half over last year

Domestic demand has been one of the locomotives of Uruguay’s solid growth

The Uruguayan economy continues to expand strongly having advanced 2.3% in the second quarter over the first quarter and 10.4% compared to a year ago and 9.8% over the fist half of 2009, according to the latest release from the Central Bank.

The bank estimates the economy will grow 6.5% this year, up from a previous estimate of 5.1% while the UN Economic Commission for Latin America forecasts 7%. Last year in spite of the world slowdown the economy expanded 2.9%, which means Uruguay in 2010 will have completed eight years running of growth.

During the second quarter power, gas and water output soared while consumer spending also managed sharp gains. Domestic demand jumped 9.8% and investment 12.9% while foreign trade also advanced, exports grew 17.3% and imports 17.5%, which has meant a higher trade surplus in the first half of the year compared to the same period in 2009.

In the second quarter virtually all sectors of the economy expanded, with Transport and Communications leading with 9.1%, the construction industry 4.4% and retail, hotels and restaurants, 5.5%. The only sectors that had a negative performance were agriculture, (excessive rain limited winter crops planting) and lesser energy generation.

Standard & Poor and Fitch ratings recently upgraded Uruguay’s long term foreign and local currency credit ratings to BB from BB-.