Uruguay’s economy continues to grow strongly, up 6.8% in the first quarter of 2011. This growth follows economic growth of 8.5% in 2010 (hat tip to former Minnesota-Uruguay Partners president Bright Dornblaser for sharing the chart above, which was featured in The Daily Reckoning).
The article reports that manufacturing (pulp paper and dairy), construction, and commerce (car sales and restaurant services) were the most dynamic sectors of the economy. Exports of goods and services expanded 14.7% in the first quarter of 2011, mainly auto parts and tourism, according to the article. Analysts forecast growth for 2011 to reach 6.3%, up from their prediction of 5.9% in May, based on quarter one’s strong performance. Interestingly, domestic demand in the first quarter rose by 8.3%.
Of course, with apartment prices rising 22 percent in the capital of Montevideo in 2010, and house prices increasing there by 17%, according to the article, it's hard to dismiss suggestions in other media outlets that a bubble may be building, not to mention the strain inflation places on pensioners and the poor.
But for those who invested a decade ago, during the dire economic crisis, in Uruguay's resort areas, the happy days may be here again. In Punta del Este alone, real estate transactions reached $2.25 billion in the 12 months to April 2011.
