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Uruguay’s economy suffers slight deceleration in 2Q but on track to the 4% target

Thursday, September 20th 2012 - 22:11 UTC
Full article 3 comments
Minister Lorenzo said results were better than expected Minister Lorenzo said results were better than expected

The Uruguayan economy experienced a slight deceleration in the second quarter of this year, but with an overall positive evolution. GDP increased 0.8% over the previous quarter and 3.8% over the same quarter a year ago, according to the latest release from the Central bank.

The increase in economic activity is supported by a better performance of Construction (22.3% in the last twelve months), plus transport, storage and communications (7.6%), while electricity, gas and drinking water experienced a strong contraction because of the several months-long drought.

Domestic demand has been the main factor boosting the economy with final consumption expenditure increasing 5.8% and gross capital investment, up 18.8%. Meanwhile imports expanded 13.2% and exports, 0.1%, widening the trade deficit gap.

In the first half of the year, Uruguay’s GDP expanded 4%, which is above the 3.41% from private estimates based on the regular survey of economic expectations from the Central bank.

If the current trend sustains, it will be three consecutive governments that have seen the Uruguayan economy expand running: the last two years of former president Jorge Batlle who cleared the mess of the 2002 financial crash (contagion from neighbouring Argentina), the five of former president Tabare Vazquez and the first two years of President Jose Mujica.

Uruguay’s GDP evolved as follows, 5% in 2004; 7.5% in 2005; 4.1% in 2006; 6.5% in 2007; 7.2% in 2008; 2.4% in 2009; 8.9% in 2010 and 5.7% in 2011.

Commenting on the results Finance Minister Fernando Lorenzo.a said that at this rate, “2012 GDP could end above the target of 4%”. He added that in the second quarter the Uruguayan economy suffered the full impact of the Argentine imports’ restrictions plus the drought that had a negative influence on power generation.

However “we can anticipate better signals for the third and fourth quarter from the region, particularly Brazil that is picking up”, estimated Lorenzo.

Categories: Economy, Politics, Uruguay.

Top Comments

Disclaimer & comment rules
  • ChrisR

    Mmm. But no comment on the sinking into the deep red by most of the state owned companies.

    USD1.14 billion in the red and taking on debt to cover this 'mismanagement' fee! And this in a country with 3.5 million people. Approximately 6,665 UY pesos for 2013 ontop of the overpriced services that everybody HAS to pay for: economics of the madhouse.

    I remember last year Lorenzo lauding UTE for 'negotiating' putting up their prices to cover their increased costs. No thought of telling them to reduce their costs or the directors get the chop.

    And how can anybody be so naive to think that negotiating prices is even possible with a government owned company?

    Sep 20th, 2012 - 10:31 pm 0
  • British_Kirchnerist

    “And how can anybody be so naive to think that negotiating prices is even possible with a government owned company?”

    Why shouldn't it be? Though the final negotiation can also be at the ballot box, thats the beauty of it...

    Sep 25th, 2012 - 03:51 am 0
  • ChrisR


    So we are to have 5 years of a fcuked up economy like Argentina?

    It's all about having the right commercial sense, which you consistently lack.

    Do you have ANY idea how poor some of these people are, even though they work six days a week?

    UY$6,665 is another £196 that every MAN, WOMAN AND CHILD will have to pay for the incompetence of the so called businessmen (who in reality are government placemen) 'running' these companies.

    Get it now?

    Sep 25th, 2012 - 11:42 am 0
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