He Ceres Leader Index (ILC) grew a 0.2% in November and marked the second consecutive increase, a good sign in terms of the economic recovery of Uruguay during the last quarter of 2023 with constant projections of the Gross Domestic Product (GDP) down.
The drought, the competitiveness problems and the exchange difference with Argentina were protagonists of a downward trend in the ILC, an indicator of activity of the Center for Studies of Economic and Social Reality (Ceres). And although they are not factors that were resolved in general—with the exception of the water crisis, which responded to natural phenomena that were reversed—October was the first month that marked the end of this negative course.
Now, November is chained in this confirmation with a slight increase of 0.2%. If the growth is repeated in December, 2023 will complete a last quarter with positive results. Likewise, these data allow us to anticipate that the end of the year will have an increase in economic activity, although the data will only be known in March and the warning about downward revisions in terms of the evolution of GDP remain in force.
In that sense, the Diffusion Index was from 67%, Indicating that two thirds of the variables that make up the ILC obtained positive results during November. “This indicates that the increase in the ILC is supported by a wide range of variables with positive rates,” Ceres stated.
The ILC is a Ceres indicator, which takes into account a set of variables that consider the internal panorama and the international context, which tend to change direction before the Gross Domestic Product (GDP) does, so it can give a signal of the trend of economic activity in real time.
The variables of growth
For Ceres, the “impact of the drought, the competitiveness problems that affect exports, the exchange rate differential with Argentina that hits local consumption and tourism—particularly in border departments—and the stoppage of the “Ancap” are factors that continue to hold back the growth of Uruguay during 2023.
On the other hand, “the number of people employed remains at high levels in historical comparison, and the real salary “It has grown during the year, exceeding pre-pandemic levels.” Added to this is the positive effect on the labor sector of road works, energy and communication lines; as well as the start-up of the plant UPM II which helps boost production.
Looking ahead to 2024, Ceres expects “a rebound in activity, given that some negative pressures will begin to subsidethere will be a low comparison br and exports and industrial production will have the boost of greater production and the realization of other investments.”
“However the relative increase of the Uruguay “It will continue to affect consumption and tourism at the local level, and competitiveness problems for the agro-export industry will persist,” he concluded.
Source: Ambito
