The economy will close 2023 with meager growth and close to a level of stagnation, after the recovery of the third quarter, as anticipated by the Chamber of Commerce and Services of Uruguay (Ccsuy).
In its report on national accounts, the Ccsuy echoed the recent report of the Central Bank of Uruguay (BCU) that exhibited a seasonally adjusted rise in GDP of 1%, driven mainly by the greater activity of the agro.
In its report, the Chamber of Commerce and Services highlighted that the improvement in the third quarter allowed the economic activity escape entering a recessive phase, but recalled that in the year-on-year comparison, so far in 2023, it is 0.4% below the levels of the same period in 2022.
An economy that suffered the impact of the drought and the international context
By slightly correcting the projections for the end of the year downwards, with an improvement close to 0%, the report evaluated the persistence of structural factors such as the lower dynamism of the chinese economy, the unfavorable relative price situation, especially due to the exchange difference with Argentina and its impact on the Commerce and Services sector, as well as the loss of competitiveness with the main commercial partners.
“If in the last quarter of this year, the economy remains unchanged compared to the previous quarter, the average growth in 2023 would be a contraction of 0.1%. In any case, it is expected to maintain this phase of lean growth and that is why the projections today are closer to a positive annual growth rate, but very close to 0%”, indicated from the Ccsuy.
To this they added that “during the first half of the year the situation of the drought and its very strong impact on the agricultural activity but also in related sectors”, while they evaluated that “there is also no doubt that the global dynamics, both regional and extra-regional, have not been a stimulus for the local economy, translating into successive months of decline in the volumes of exported goods.
What is expected for 2024?
For next year, the Ccsuy He anticipated that he has “a relatively more optimistic view” and pointed out that growth projections reach 3%, “largely due to a rebound in both the sector agro as the manufacturing industry”.
The survey highlighted that during 2024 the effects of leaving behind the drought, The reopening of the La Teja refinery in Ancap and it will be a year of full operation of UPM 2.
Finally, the Chamber anticipated that “less adverse news could occur outside the region than in previous years, particularly on the side of USA, given the pause in the rise of interest rates and, therefore, more benevolent financial conditions for Uruguay”.
In turn, he stressed that “on the regional front, it is possible to foresee a more optimistic situation for the second half of 2024, as long as macroeconomic corrections become present and Argentina can reach a certain stability economic, fiscal, exchange, financial, social and political”, in such a way as to moderate the price gap between both countries.
Source: Ambito
