MercoPress. South Atlantic News Agency

Uruguay’s GDP expands 4.8% in second quarter buoyed by domestic demand

Rising sales of automobiles and imported goods helped the performance

Uruguay’s GDP expanded 4.8% in the second quarter from a year earlier, the central bank said Wednesday on its website.

GDP climbed 0.5% compared with the first quarter of 2011, the bank said. This represented a slowdown in expansion from the first quarter, when the economy grew 6.6% year-on-year and 2.1% from the previous quarter.

The slowdown resulted in part from a drop in demand for beef, which caused raw materials output to contract 2.1%, said Pablo Moya, an economist at Montevideo-based research company Oikos.

“In the first quarter the economy grew a lot, so that’s why the second quarter showed such a great contrast” said Moya.

Uruguay's traditional agriculture-based economy was buoyed by domestic demand growth of 11.9% in the second quarter, compared with the same period of 2010.

Rising sales of automobiles, imported consumer goods and mobile phone and internet services helped fuel the expansion, according to the central bank.

Uruguay’s government forecasts economic growth will slow to 6% this year from 8.5% in 2010. However private analysts estimate this year’s growth at 6.5% to a central bank survey of 11 economists published on August 19.

In June, the central bank raised the overnight lending rate to 8% while signalling that inflationary pressures persist. Consumer prices rose 7.57% in August from a year earlier, the national statistics institute INE reported.

Central bank policy makers are scheduled to meet on September 29 to discuss changes in the benchmark rate.