Uruguay Economic Forecast

Uruguay Economic Outlook

September 10, 2019

The economic situation remained dire in the second quarter following the first-quarter downturn, haunted by frail external conditions and faltering domestic demand. Unemployment jumped to an over one-decade high in Q2, signaling a sustained downturn in household consumption, while a weaker peso boded ill for investment. Meanwhile, the country is gearing up for a presidential election due on 27 October, with early polls suggesting a tightly contested race between the Broad Front Party’s Daniel Martínez and the National Party’s Luis Lacalle Pou. Against this backdrop, on 6 August, Moody’s affirmed Uruguay’s Baa2 credit rating with a stable outlook, citing low political risk thanks to the country’s mature and consensus-building political system. That said, Moody’s noted that gradually eroding fiscal strength and a structural decline in growth potential could dampen the outlook in the near future.

Uruguay Economic Growth

Growth is seen more than halving this year as the external sector feels the pinch of the marked downturn in Argentina, while domestic demand faces rising headwinds stemming from high unemployment, stagnant wages and a depreciating peso. Downside risks stem from uncertainty over October’s general election, while a swift ratification of the EU-Mercosur trade deal is an upside risk. FocusEconomics analysts see growth at 0.6% in 2019, which is down 0.2 percentage points from last month’s forecast, and 1.6% 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 Rate36.720.24 %Sep 04

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