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Uruguay Economic Forecast

Uruguay Economic Outlook

After growing in Q1, the economy likely contracted year on year in Q2 on the back of double-digit interest rates and as a severe drought weighed on hydroelectrical generation, agricultural output and the food processing industry. The volume of agricultural exports plummeted 45% in annual terms in the quarter, with food-related manufacturing exports down 7%. More positively, inflation dipped notably in the quarter, which, together with strong wage growth, should have supported private consumption. Heading into Q3, GDP is expected to return to growth, thanks to rate cuts by the Central Bank, a further pullback in inflation, and the easing of the historic drought. Recent rains saw the water level at the Paso Severino dam, which supplies water to Montevideo, rise to close to 50% capacity in late August from single digits at end-Q2.

Uruguay Inflation

Inflation came in at 4.1% in August, which was down from July’s 4.8% and well within the Central Bank’s 3.0–6.0% target range. August’s figure marked the lowest inflation rate since September 2005. Inflation should remain within the Bank’s target range in H2 despite an expected slight uptick by year-end on monetary easing and higher oil prices.

This chart displays Economic Growth (GDP, annual variation in %) for Uruguay from 2013 to 2022.

Uruguay Economic Data

2018 2019 2020 2021 2022
Population (million) 3.5 3.5 3.5 3.5 3.6
GDP (USD bn) 65.2 62.0 53.6 61.3 71.1
GDP per capita (USD) 18,609 17,620 15,189 17,313 20,004
GDP (UYU bn) 2,003 2,188 2,255 2,675 2,930
Economic Growth (Nominal GDP, ann. var. %) 7.5 9.2 3.1 18.6 9.6
Economic Growth (GDP, ann. var. %) 0.2 0.7 -6.3 5.3 4.9
Domestic Demand (ann. var. %) 0.6 -0.3 -4.7 6.5 5.1
Private Consumption (ann. var. %) 1.8 0.6 -6.8 2.9 6.0
Government Consumption (ann. var. %) 4.9 1.9 -7.1 8.4 1.6
Fixed Investment (ann. var. %) -10.5 -2.0 1.2 16.5 9.5
Exports (G&S, ann. var. %) -1.1 4.6 -16.3 11.7 11.1
Imports (G&S, ann. var. %) 0.6 1.3 -12.2 18.2 12.5
Unemployment (% of active population, eop) 8.4 8.5 10.6 7.0 7.9
Unemployment (% of active population, aop) 8.4 8.9 10.4 9.3 7.9
Fiscal Balance (% of GDP) -2.7 -3.2 -5.2 -3.5 -3.2
Public Debt (% of GDP) 59.0 60.1 74.4 69.1 67.2
Inflation (CPI, ann. var. %, eop) 8.0 8.8 9.4 8.0 8.3
Inflation (CPI, ann. var. %, aop) 7.6 7.9 9.8 7.7 9.1
Inflation (PPI, ann. var. %, aop) 9.7 12.8 10.5 14.4 12.4
Monetary Policy Rate (%, eop) 9.25 9.25 4.50 5.75 11.25
Average Deposit Rate (%, aop) 5.12 5.07 4.79 3.80 6.24
Exchange Rate (UYU per USD, eop) 32.45 37.73 42.19 44.71 39.65
Exchange Rate (UYU per USD, aop) 30.71 35.28 42.04 43.60 41.20
Current Account Balance (USD bn) -0.3 0.8 -0.4 -1.6 -2.6
Current Account Balance (% of GDP) -0.5 1.2 -0.8 -2.5 -3.7
Merchandise Trade Balance (USD bn) 2.4 3.1 2.2 4.6 3.5
Merchandise Exports (USD bn) 11.8 11.9 10.1 15.8 17.1
Merchandise Imports (USD bn) 9.4 8.8 7.9 11.2 13.6
Merchandise Exports (ann. var. %) 5.9 0.7 -14.6 56.3 7.8
Merchandise Imports (ann. var. %) 2.5 -6.8 -9.7 41.8 21.0
Foreign Direct Investment (USD bn) 0.0 2.0 0.8 2.2 3.8
International Reserves (USD bn) 15.6 14.5 16.2 17.0 15.1
International Reserves (months of imports) 19.9 19.9 24.6 18.1 13.4
External Debt (USD bn) 43.0 45.2 47.1 48.4 53.3
External Debt (% of GDP) 66.0 72.9 87.8 79.0 74.9

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