Uruguay’s economic growth quickened in the first quarter, spurred by increased transport and communications.
Gross domestic product expanded 4.2 percent from a year earlier and grew 1.9 percent from the fourth quarter of 2011, the central bank said today on its website. In the final quarter of last year, the economy grew 3.5 percent year-on-year and contracted 1.6 percent from the previous period.
Growth was led by transport and communications, which expanded 9.4 percent, while retailers boosted activity 5 percent, the bank said. Construction expanded 12.9 percent, mainly because of the building of a 2 billion dollar pulp mill in the west of the country, the bank said. A shutdown at the state oil refinery until mid-February caused industrial output to shrink 1.2 percent. Drought led to a 22 percent contraction in electricity, gas and water supplies.
In March, the policy makers left the overnight lending rate at 8.75 percent while signaling concern about increasing inflationary pressures in an uncertain global context. Consumer prices rose 8.06 percent in May from a year earlier, the fastest rate of increase since December, the national statistics institute reported on June 4.
Argentina, Global Outlook
Last year, the agriculture-based economy grew 5.7 percent, fueled by growing domestic demand and increased exports. Analysts expect 4.45 percent expansion in 2012 according to the median of 10 economist surveyed by the central bank in May.
Import restrictions by neighboring Argentina and the impact of the global economic crisis held back growth in the first quarter, said Ramiro Almada, an economist at Oikos research firm in Montevideo.
“We expected an impact from the refinery and other industry sectors affected by Argentina’s trade barriers and the international crisis,” Almada said. “In the next quarter there may be a slight contraction because of the global crisis but we estimate that the economy will grow 4 percent this year.”
The yield on Uruguayan dollar bonds maturing in 2022 fell one basis point, or 0.01 percentage point, to 3.43 percent, at 2:19 p.m. New York time. The price of the securities rose 0.12 cent to 139.71 cents on the dollar.
Policy makers will meet July 3 to discuss the benchmark rate.
To contact the reporter on this story: Lucia Baldomir in Montevideo at firstname.lastname@example.org