Uruguay Economic Forecast

Uruguay Economic Outlook

July 9, 2019

The economy contracted for the first time in nearly four years in the first quarter. Slower wage growth, rising unemployment and a weaker peso caused private consumption to contract once again, which, coupled with sliding fixed investment due to tumbling private sector activity, led a downturn in domestic demand. On the external front, feeble demand from Argentina and Brazil, the country’s key trading partners, caused exports to slump for a fifth consecutive quarter, while the tourism sector remained in the doldrums. In the political arena, Uruguay held presidential primaries on 30 June. The opposition National Party and its leader Luis Lacalle Pou won decisively, beating the ruling Broad Front coalition and its candidate Daniel Martínez. The Colorado Party, headed by Ernesto Talvi, trailed in third place. The results signal the 27 October presidential elections will be a closely fought contest.

Uruguay Economic Growth

Growth will nosedive this year, against the backdrop of a weak external environment, amid downturns in Argentina and Brazil, and deteriorating domestic demand. Stagnant real wages, a weaker peso and high unemployment will dent household spending growth, although the recently signed EU-Mercosur free trade deal should boost growth in the medium-term. FocusEconomics analysts see growth at 0.8% in 2019, which is down 0.4 percentage points from last month’s forecast, and 1.8% in 2020.

Uruguay Economy Data

20132014201520162017
Population (million)3.43.53.53.53.5
GDP per capita (USD)16,77116,82915,57514,98017,206
GDP (USD bn)57.758.154.052.160.1
Economic Growth (GDP, annual variation in %)4.63.20.41.72.6
Consumption (annual variation in %)5.53.0-0.50.14.6
Investment (annual variation in %)3.82.4-9.2-1.6-15.7
Industrial Production (annual variation in %)4.11.13.10.3-11.1
Unemployment Rate6.56.67.57.97.9
Fiscal Balance (% of GDP)-2.3-3.5-3.6-3.8-3.5
Public Debt (% of GDP)60.261.464.661.665.7
Money (annual variation in %)-  -  -  -  -  
Inflation Rate (CPI, annual variation in %, eop)8.58.39.48.16.6
Inflation Rate (CPI, annual variation in %)8.68.98.79.66.2
Inflation (PPI, annual variation in %)-  -  -  -  -  
Benchmark Interest Rate (%)7.357.176.946.585.56
Exchange Rate (vs USD)21.1324.3729.9129.3328.83
Exchange Rate (vs USD, aop)20.4123.2127.3130.1428.66
Current Account (% of GDP)-3.6-3.1-0.90.60.8
Current Account Balance (USD bn)-2.1-1.8-0.50.30.5
Trade Balance (USD billion)1.12.01.31.92.1
Exports (USD billion)13.313.811.110.410.8
Imports (USD billion)12.211.89.88.58.7
Exports (annual variation in %)1.73.7-19.1-6.94.1
Imports (annual variation in %)-4.3-3.4-16.5-14.02.4
International Reserves (USD)16.317.815.613.416.0
External Debt (% of GDP)66.070.981.076.768.5

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Uruguay Facts

ValueChangeDate
Exchange Rate35.110.24 %Jul 11

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