Uruguay: Uruguayan economy contracts slightly in Q4; growth slows notably in full-year 2015
March 15, 2016
Against a backdrop of low export prices, high inflation and decreasing government revenues, the Uruguayan economy recorded a 0.1% year-on-year contraction in Q4 2015, which contrasted Q3’s 0.5% expansion. The deterioration was mainly driven by a weaker performance of the external sector and lower government spending. Fixed investment continued to contract, albeit at a softer pace, than in Q3, while private consumption picked up. In the full year 2015, the Uruguayan economy grew at the slowest pace in 12 years, expanding 1.0% (2014: +3.2% year-on-year).
Government consumption growth slowed in Q4, growing 1.8%, which was the smallest expansion since Q3 2006 (Q3: +2.8% yoy). Private consumption rose 0.4% in Q4 (Q3: -0.8% year-on-year). Altogether, total consumption rose 0.6% in Q4, which contrasted Q3’s 0.4% contraction. Fixed investment advanced somewhat from Q3’s steep 15.1% contraction to a softer 11.3% drop in Q4.
Exports contracted at a softer pace, falling 3.0% in Q4 (Q3: -6.6% yoy). Meanwhile, imports fell 9.1%, which was a less pronounced drop than September’s sharp 14.6% fall. Thus, the external sector’s contribution to growth declined from a notably 13.1 percentage points in Q4 to 8.7 percentage points in Q4.
A quarter-on-quarter comparison confirms the deterioration as evidenced in the annual growth figures. The economy grew a meagre 0.1% in Q4 over the previous quarter in seasonally-adjusted terms, which came in below Q3’s 1.0% increase.