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Economic activity in the first quarter did not meet expectations

Economic activity in the first quarter did not meet expectations

The UCU Economic Situation Observatory reported that the beginning of the year was “less dynamic” than thought.

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Economic activity in the first quarter of the year, according to the report of the Observatory of the Economic Situation of the Catholic University of Uruguay (UCU) did not meet the growth expectations that the Central bank, although it does not mean that the annual goal cannot still be met.

The report states that “the start of the year was less dynamic than expected.” In this sense, they highlight that the quarterly and interannual evolution of the Gross Domestic Product (GDP)which has a figure for the first quarter of 2.1%, was the consensus estimate (median) surveyed by the BCU expectations survey in March.

For its part, it establishes that the Monthly Indicator of Economic Activity (IMAE) For the last known quarter (December 2023 to February 2024), which showed a variation of +0.2%, it was well below what was expected.

However, the report establishes that, despite not having met the expected numbers for the first quarter, the growth expectations calculated in 2023 of 3.5% are still maintained, which coincide with the estimates of the Ministry of Economy and Finance (MEF).

Meanwhile, analysts are waiting for the estimates of the central bank of the IMAE that will be published this Friday and that of the GDP for the first quarter that would be made public in the middle of next month.

The most affected activities

The first quarter of this year is one of those that saw its economic activity most affected when compared to others. Among the sectors with the least activity is, in first place, imports of intermediate goods with a decrease of 11% year-on-year.

This is followed by exports and imports (excluding energy) which suffered a drop of 8% year-on-year. Meanwhile, imports of capital goods suffered a drop of 7%.

For its part, the manufacturing industry suffered a decrease in its activity of 5.5% while the core industry suffered a decrease of 6%.

Meanwhile, the collections of the DGI suffered a drop of 1% and those of the Value Added Tax (VAT) They also suffered a decrease of 2%.

What refers to tourism, Its exports suffered a year-on-year decrease of 4%, while imports increased by 2%. Both data are based on the Balance of Payments.

Source: Ambito

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