The fall in exports of goods, the stagnation in the export of services and the greater spending of Uruguayans abroad impacted the balance of payments.
In recent days, the closing data for the year 2023 corresponding to the exports of goods, which showed a drop of 13%, measured in dollars. But the picture of the country’s trade with foreign countries is incomplete if imports and trade in services are not included. Indeed, for a long time countries measured their relationship with the world based on trade in goodsbut the modernization of economies has made the services, both locally and exchanged between countries.
Commercial services (transport, logistics), tourist services – constantly expanding in the world – and a whole new area of global services – covering information technologies, design and other areas – make up increasingly important commercial currents. Uruguay is not the exception in this sense.
The consolidated data of the relationships of the Uruguay with the exterior, updated a few days ago by the central bank in its Balance of paymentswith figures as of September (table), show a deterioration in the trade balance with the rest of the world, for various reasons that are worth analyzing.
On the one hand, the drop in exports of goods has implied a reduction in income, while the amount of imports (expenses) has remained almost stable compared to 2022. In the first case, a good part of the fall is explained by the impact of the drought in soybean production, to which was added the decrease in export prices of meat, among other products. In the imports There is a drop in the amount imported for intermediate products, while the amount for imports of machinery and consumer goods increases slightly. Thus, the trade balance of goods, exclusively, went from a positive balance of almost 1.2 billion to a deficit of almost 1.15 billion dollars.
In the case of the services, Uruguay is registering a notable expansion in the export of global services. Among them is the area of Information technology, whose main market is USA and which set a record for foreign turnover in 2022, with an amount of almost 1.7 billion dollars. However, in 2023 the contraction that occurred in the technology sector in the United States (main market) impacted Uruguay and there was stagnation or even a certain retraction in the sales of these services abroad.
As for the tourism, which is the main export service of the Uruguay, There was a significant increase in income in 2023, given that until 2022 Uruguay was still suffering the effects of the pandemic. In the last year that was left behind and annual income from tourism went from more than 1,400 to more than 2,400 million dollars.
At the same time, spending on tourism by Uruguayans in the rest of the world grew dramatically, which is basically explained by the difference in prices with Argentina, to which we must add the increase in income in Uruguay, particularly when measuring it in dollars. According to data from the BCU Balance of Payments, said expenditure increased from 800 to more than 1.5 billion dollars annually, between September 2022 and September 2023.
All these changes explain that the trade balance will go from net positive to net negative in a year. In addition to the exchange of goods and services, the Current account of a country includes the so-called Primary Income, that is, interest on debt and business dividends, which leave or enter a country. In the case of Uruguay This line is particularly negative, due to the high incidence of international companies that transfer dividends abroad. As of September 2023, the net balance of Primary Income was negative by almost 6 billion dollars. This deficit is partially offset by the positive balance of almost 3,000 million dollars generated by merchandise trading companies, which operate in Uruguay. So the Current Account deficit of Uruguay It remains at just over 3.6 billion dollars annually (figures as of September 2023).
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Source: Ambito
