Uruguay: Economic growth accelerates in Q3 but remains subdued
The economy rose 0.9% year-on-year in the third quarter, following a flat reading in the second quarter. Meanwhile, in quarter-on-quarter, seasonally-adjusted terms, GDP rose 0.6% in Q3, following Q2’s 0.3% expansion and marking the best result in one year and a half .
The third-quarter upturn was chiefly driven by the external sector’s improved performance. Growth in exports of goods and services accelerated notably in Q3 (Q3: +9.3% year-on-year; Q2: +3.5% yoy), marking the fastest increase since Q2 2013, on the back of soaring exports of primary products, especially soybeans. Meanwhile, imports of goods and services rebounded in Q3, although at a soft pace overall (Q3: +1.6% yoy; Q2: -0.3% yoy).
Meanwhile, domestic demand contracted, although the drop was due to a large reduction of stocks of finished agricultural products, especially soybeans. Fixed investment ticked up (Q3: +0.8% yoy; Q2: -4.1% yoy), led by higher private sector fixed investment, while slumping public sector investment activity—especially in public infrastructure—limited the extent of the rebound. On top of that, private consumption bounced back in the third quarter (Q3: +1.3% yoy; Q2: -0.1% yoy) thanks to some improvement in the labor market and despite still-high inflation and a falling peso. Lastly, public spending growth was flat in the quarter (Q2: +0.4% yoy) as the government strived to keep public finances under control.