The growth was supported by the good performance of energy generation, agricultural activity and exports of goods.
The Uruguayan economy began 2024 with an expansion of 0.9% in seasonally adjusted terms and with an improvement in the year-on-year comparison. The growth was supported by the good performance of energy generation, agricultural activity and exports of goods in the first quarter of the year.
The estimate for this year is that it leaves behind the weak performance of 2023 and reaches growth levels above 3%.
The Gross Domestic Product (GDP) grew 0.9% in the period between January and March of this year compared to the fourth quarter of last year.
Meanwhile, the Uruguayan economy expanded 0.6% in the first quarter of 2024 year-on-year, according to the National Accounts report released this Thursday by the Central Bank (BCU).
The activity of the electric energy, gas and water segment verified an increase of 20% compared to the first quarter of 2023, which was fundamentally explained by the greater generation of hydraulic energy. This contrasted with the energy reality of the previous period when, due to the drought, thermal generation and imports from Brazil had to be resorted to.
In the agricultural segment, the rebound in forestry activity was highlighted, basically associated with a greater demand for wood for industrial processing after the opening of the second UPM plant. There was also an increase in cattle slaughter, the greater shipment of milk and the better yield of the soybean harvest compared to the previous one, which had been strongly affected by the drought.
Exports of goods and services grew 4.5%, with emphasis on external sales of pulp, wheat, beef and barley.
In the services segment, the increase in exports of management consulting services and information technology services stood out.
Negative performance in GDP
The negative result of the first quarter was verified in the manufacturing industry. The sector showed a contraction of 10.3% in the interannual comparison. The greatest impact was due to the lower activity in oil refining due to the stoppage that took place at the La Teja refinery.
Ancap decided to turn it off in September of last year to carry out maintenance tasks. Beyond impacting the GDP, the lack of refining was also felt in the accounting results of the public company, which ended the first quarter of the year with losses of US$ 48 million.
Construction was the other industrial sector that had a negative performance in the quarter as a result of the end of the works on the second UPM plant in Pueblo Centenario and the lower investment allocated to the construction of the Central Railway.
Consumption
Household consumption spending had an interannual growth of 1.8%. There, the purchase of vehicles, clothing, passenger transportation services and restaurants and hotels stood out. In contrast, lower expenses were verified in education and tourism services abroad.
Perspectives
After closing the year with an expansion of 0.4%, a rebound in economic activity is expected for this year.
Analysts consulted by the Central Bank estimated that the Uruguayan economy will grow 3.49% in 2024. The forecast is in line with the projection of the Ministry of Economy, which expects a growth of 3.5%. “This is very similar to what we had presented in the Accountability Report, which was 3.7%. The growth at the level of the different sectors is quite balanced there,” said the Minister of Economy, Azucena Arbeleche, in an interview with the newspaper.
The economist José Licandro highlighted in his X account (exTwitter) the good economic performance of the first quarter of the year.
“That annualized figure would be signaling a growth for all of 2024 of 3.6% if maintained in the following quarters,” he wrote.
Analyst Aldo Lema mentioned that there was a lot of heterogeneity in the performance of supply and demand that supports the 0.9% quarter-on-quarter growth of Uruguayan GDP.
“Perhaps the most notable thing was the recovery of the seasonally adjusted volume of exports of goods and services,” he added.
Florencia Carriquiry, partner of the consulting firm Exante, indicated that the growth of the economy was above the 0.7% indicated by the Monthly Indicator of Economic Activity (IMAE).
“At the sector level, the rebound after the drought in electricity and agriculture stood out,” he said on the same social network.
