1. Market Research
  2. > Financial Services
  3. > Banking
  4. > Payments Market Trends
  5. > Uruguay Country Risk Report Q2 2016

Uruguay Country Risk Report Q2 2016

  • March 2016
  • -
  • Business Monitor International
  • -
  • 39 pages

Core Views Uruguay is set to experience a period of structurally lower growth in the coming years, as investment into expanding agricultural production and re-export capacity is tempered and foreign capital begins to flow into Argentina as the new Argentine government liberalises its investment environment. Nonetheless, Uruguay will continue to outpace Latin America's average real GDP expansion as the country's middle class supports private consumption growth. Inflation will remain elevated over the coming years as the Banco Central del Uruguay will not implement significant policy measures to stymie price increases. The bank will instead focus on attempts to spur growth and encourage consumption with low borrowing costs as tempered investment weighs on economic growth.

There will be significant headwinds to the country's balance of payments as Argentines begin to repatriate assets stored in Uruguayan banks and Chinese demand growth for agricultural goods is tempered over the coming years as compared to the previous decade. This will have a negative impact on both the current and financial accounts. As well, it will lead to a continued depreciation of the Uruguayan peso. Major Forecast Changes We have revised our growth forecast for 2016 downward, to 0.8% from 0.9% as headwinds to the country's net exports balance will weigh on real economic expansion.

Table Of Contents

Uruguay Country Risk Report Q2 2016
Executive Summary 5
Core Views5
Major Forecast Changes5
Key Risks5
Chapter 1: Economic Outlook 7
SWOT Analysis 7
BMI Economic Risk Index 7
Economic Growth Outlook 8
Trade Partner Weakness Will Cause Growth Slowdown In 20168
Uruguay's real GDP growth will slow in 2016 on the back of tempered fixed investment and a widening net export deficit Private
consumption will be a bright spot in the economy, as wages continue to rise, bolstering retail spending
GDP By Expenditure Outlook 9
TABLE: GDP FORECASTS9
TABLE: PRIVATE CONSUMPTION FORECASTS9
TABLE: GOVERNMENT CONSUMPTION FORECASTS10
TABLE: GROSS FIXED CAPITAL FORMATION FORECASTS10
TABLE: NET EXPORT FORECASTS10
Fiscal Policy And Public Debt Outlook 10
Countercyclical Policy Will Widen Deficit In 201610
Uruguay's budget shortfall will widen in 2016 on the back of rising government spending and decelerating revenue growth The
expanding deficit will not significantly erode the country's sovereign credentials as investors acknowledge this is a temporary shift to
countercyclical fiscal policy rather than structural change
External Trade And Investment Outlook 12
Weakness In Neighbours Will Deteriorate External Accounts12
Uruguay's balance of payments dynamics will deteriorate in 2016 due to slowing growth in key trade partners, weighing on exports and
investment Over a multiyear time frame, stronger growth in Argentina will feed through to rising investment in Uruguay's port and road
infrastructure
Outlook On External Position 13
TABLE: TOP FIVE GOODS EXPORTS IN 201414
TABLE: TOP FIVE GOODS IMPORTS IN 201414
Monetary Policy 15
Monetary Policy Will Have Little Impact On Growth15
Banco Central del Uruguay will enact monetary tightening in 2016 as a currency sell-off drives import costs higher Traditional measures
of monetary policy will have little impact on growth as external account deterioration will be the main driver of decelerating economic
activity
Monetary Policy Framework 16
Currency Forecast 17
UYU: Persistent Weakness Through 201717
The Uruguayan peso will depreciate modestly in 2016, on the back of slowing investment and deteriorating trade dynamics Over a
longer time horizon, the peso will gradually appreciate as investments from Argentina ramp up beginning in 2017
TABLE: BMI CURRENCY FORECAST18
Regional Economic Outlook 18
FX Weakness Will Drive Rising Inflation Throughout Region18
Inflation will rise throughout Latin America in H116, as regional currencies weaken further on low commodities prices and a strong US
dollar These dynamics will be exacerbated in some economies by elevated government spending and adverse weather conditions
Chapter 2: 10-Year Forecast 21
The Uruguayan Economy To 2025 21
Exposure To Trade Presents Headwinds To Growth21
Over a multiyear time horizon, Uruguay will face significant headwinds to headline growth as investment into its large agricultural and
re-export industries declines Consumption will become an increasingly key driver of growth as Uruguay's large middle class continues
to see disposable incomes rise
TABLE: LONG-TERM MACROECONOMIC FORECASTS21
Chapter 3: Political Outlook 25
SWOT Analysis 25
BMI Political Risk Index 25
Domestic Politics 26
Ties With Argentina Will Improve Dramatically26
Uruguay's relationship with Argentina will improve significantly in the years ahead Stronger ties will bolster the prospect of new bilateral
trade agreements, and also supporting the Mercosur trade bloc's unity
TABLE: POLITICAL OVERVIEW26
Chapter 4: Operational Risk 29
SWOT Analysis 29
Operational Risk Index 29
Operational Risk 30
TABLE: OPERATIONAL RISK30
Trade Procedures And Governance 31
TABLE: EXPORT AND IMPORT DOCUMENTS31
TABLE: TRADE PROCEDURES BREAKDOWN31
TABLE: LATIN AMERICA - TRADE PROCEDURES AND GOVERNANCE RISK 32
Vulnerability To Crime 33
Chapter 5: BMI Global Macro Outlook 35
Global Macro Outlook 35
Tail Risks Mounting Amid Sub-Par Growth35
TABLE: GLOBAL ASSUMPTIONS35
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %36
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%) 36
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % 37
TABLE: MACROECONOMIC DATA and FORECASTS39

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Ahmad

+1 718 618 4302

Purchase Reports From Reputable Market Research Publishers
Asia-Pacific Mobile Payments

Asia-Pacific Mobile Payments

  • $ 4950
  • Industry report
  • September 2016
  • by Frost & Sullivan

Spearheading Cashless Societies Countries within Asia-Pacific are trying to go cashless; mobile payment has been identified as an ideal solution to spearhead the transformation from cash-based to cashless ...

Growth Opportunities in the APAC Fintech Market

Growth Opportunities in the APAC Fintech Market

  • $ 4950
  • Industry report
  • October 2016
  • by Frost & Sullivan

Emergence of Asia-Pacific as a Fintech Innovation Center This research service explores the financial technology (fintech) market in Asia-Pacific and the potential impact on traditional banking services, ...

Global Electronic Funds Transfer at Point of Sale Terminals Market, Forecast to 2022

Global Electronic Funds Transfer at Point of Sale Terminals Market, Forecast to 2022

  • $ 4950
  • Industry report
  • November 2016
  • by Frost & Sullivan

Secure and Multi-functional Mobile Terminals Drive Market Growth Across Regions This study provides an in-depth analysis of the global electronic funds transfer at point of sale (EFTPOS) terminals market. ...

Global Atm Market (2016 - 2022)

August 2016 $ 3600

ref:plp2016

Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.