Uruguay Economy Grows Faster Than Forecast in Third Quarter
Uruguay’s economy grew faster than economists expected in the third quarter, spurred by increased construction, transportation and communications activity.
Gross domestic product expanded 3 percent from a year earlier, the central bank said today on its website, exceeding the 2.4 percent median estimate of four economists surveyed by Bloomberg. The economy grew 1.2 percent from the second quarter, the bank said.
Growth was led by transportation and communications, which expanded 7.1 percent, the bank said. Construction expanded 12 percent, mainly because of the building of a $2 billion pulp mill in the west of the country, the bank said. On the other hand, electricity, gas and water supply shrank 37.1 percent amid a drought.
“2012 will end up as a year of low growth compared to the pace we were used to in recent years,” said Pablo Moya, an economist at research company Oikos.
The economy will expand 3.6 percent this year and 4 percent in 2013, according to the median estimate of 10 economists surveyed by the central bank in November. Last year, the agriculture-based economy grew 5.7 percent, fueled by rising domestic demand and increased exports.
Uruguay’s credit rating was raised to investment grade by Standard & Poor’s in April and by Moody’s Investors Service in July after the South American country reduced debt and diversified exports.
In September, the central bank increased its benchmark interest rate to 9 percent from 8.75 percent, saying “solid” domestic demand and rising global commodity prices convinced policy makers that inflation could quicken. Consumer prices rose 9.03 percent in November from a year earlier, the national statistics institute reported on Dec. 4.
The bank’s five-member policy committee will meet on Dec. 28 to decide whether to change the rate.
To contact the reporter on this story: Lucia Baldomir in Montevideo at email@example.com