Uruguay: Economy stagnates in Q3 as regional turmoil bites
December 13, 2018
A comprehensive breakdown by the Central Bank of Uruguay showed that the economy decelerated to 2.1% year-on-year in the third quarter, down from the second quarter’s revised 2.6% outturn (previously reported: +2.5% year-on-year). Despite marginal improvements across the domestic economy, increased regional uncertainty and a crisis-stricken Argentine economy weighed down the external sector.
On the external front, a poor soybean harvest and tepid demand out of Argentina each took a toll on foreign trade. Exports plummeted 10.4% from a year earlier (Q2: -7.5% yoy) despite a depreciation of the peso. On the other hand, imports lost momentum and grew 3.3% year-on-year (Q2: +5.0% yoy).
Domestically, fixed investment contracted (Q3: -0.4% yoy; Q2: +3.0% yoy) as both private- and public-sector capital spending tuned out. Government consumption, on the other hand, eased to 0.7% growth from 1.5% a quarter earlier. Meanwhile, private consumption grew 2.7% year-on-year in the third quarter (Q2: +2.6% yoy) amid weaker inflation.
On a quarter-on-quarter basis, the economy stagnated and experienced essentially no growth in seasonally-adjusted terms (Q2: +0.1% quarter-on-quarter s.a.)
Uruguay GDP Forecast
Panelists participating in the LatinFocus Consensus Forecast expect growth of 1.9% in 2019, which is down 0.1 percentage points from last month’s forecast, and 2.6% in 2020.
Author: Nicolás J. Aguilar, Economist