Weekly Report - 04 April 2012 (WR-12-14)

URUGUAY | Slowing down. After an unprecedentedly sustained period of high growth, statistics suggest the Uruguayan economy is finally starting to slow down. According to the central bank, the economy still grew by an impressive 5.7% year-on-year in 2011 but this was less than predicted, after growth of 8.9% in 2010. GDP growth in 2011 was driven by retail, tourism, transport and communications sectors, but GDP grew by just 3.5% year-on-year in the final quarter, the slowest growth for this period since 2006, and contracted by 1.9% in on the previous quarter.
    The government’s economic team expressed satisfaction with the pace of growth, however, pointing out that it was above the regional average for the seventh consecutive year, and that it came despite the adverse global economic context. The decline in the final quarter was also heavily influenced by the drought which impacted hydroelectric power generation and the inactivity of the La Teja oil refinery which was undergoing maintenance as well as suffering a labour conflict since last August until January. The Industrial sector contracted by 7.9% and the electricity, gas and water sector by 41.4% year-on-year in the final quarter.