Uruguay’s Economy Grows 9.6% y/y in H1 2010

Uruguay continued to grow robustly in Q2 2010, with a 10.4% y/y growth, outperforming Q1’s 8.8% y/y expansion and averaging a 9.6% y/y growth in H1 2010. On a seasonally adjusted basis, Uruguay expanded by 2.6% q/q, at a seasonally-adjusted annual rate (SAAR) of 10.9%, after Q1’s 2.03% q/q SA growth (8.4% SAAR). Strong domestic demand and recovered external accounts led the expansion in Q2. Fixed capital investment jumped to 16% y/y from 6.6% y/y in the last period, led by a 24% y/y increase in private investment, balanced by a 4% y/y contraction in public investment. Consumption jumped over 2.5 points to 10.7% y/y, while government spending shrunk a point to 4.6% y/y. External accounts also gained terrain, with exports surged by 17.3% y/y and imports 17.5% y/y from 3.9% y/y and 10.6% y/y, respectively.

From the supply side, utilities exploded once again (375.4% y/y) as Q2 2010 electric sector was not affected by last year’s draught. Strong domestic demand pushed commerce up by 16.3% y/y (10.7% y/y in Q1), while transport and communications gained 17.3% y/y (12.5% y/y in Q1). The manufacturing sector grew by 5.7% y/y, up from 4.6% y/y, thanks to a strong external demand.

Editor’s Note: This post is excerpted from a much longer analysis available exclusively to RGE Clients, LatAm Focus: Intervention Is Back

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