Uruguay’s Gross Domestic Product grew by an estimated 11.5% in 2008, which was the highest rate of economic growth in Latin America.
For perspective, the combined Latin American GDP growth for 2008 is estimated to be 4.6%. Uruguay’s performance was followed by Peru (9.4% growth) and Panama (9.2% growth). Brazil, Latin America’s largest economy, grew at a rate of approximately 6%.
Uruguay’s 2008 economic growth was fueled by an increase in the value of agricultural goods, expanded trade, and foreign investment.
Higher value of Uruguayan Agricultural Goods:
The dollar value of Uruguayan beef and lamb exports were up almost 50%. This is partly due to the growing popularity (and dollar value) of Uruguay’s organic grass fed beef. Dairy exports were up just under 25%, again thanks to higher market prices. Uruguayan grains and oil seeds were up almost 60%. Uruguay had a record year of wheat, rice, and soybean production.
Uruguay’s exports grew at an average annual rate of over 30% in 2008 for a total of 6.5 billion dollars in exports. The rate was higher in the first half of the year and lower in the second half of the year due to the impact of the global credit challenge. Uruguay has increased its beef sales to Russia and Asia, and doubled the sale of lamb to the Middle East.
Increased Foreign Investment:
Foreign investment in Uruguay has been in forestry, industry, construction, and mining. The largest foreign investment in Uruguay’s history was the construction of a pulp mill at a cost of 1.2 billion US dollars by the Finnish company, Botnia, which started operations in 2007. See related story.
Uruguay’s 2009 economic challenges going into 2009 will be the subject of a future post.