...The country s strong trade ties with Argentina and Brazil will further weigh on real exports with both economics poised for negative growth in ----. ...The more challenging growth dynamics in Uruguay s main trade partners has also made long-term investments into Uru- guay less attractive, as traditionally investment centred around firms looking to take advantage of the country s external trade industries. While the government will likely implement policies to encourage investment into consumer goods manufacturing meant to service domestic consumers, this will take years to ramp up given the Uruguay s heavy dependence on external investors and its small base of existing domestic production. Uruguay s banking and real estate sectors will be especially susceptible to a slowdown in capital inflows in the year ahead. ...Uruguay s banking and real estate sectors will be especially susceptible to a slowdown in capital inflows in the year ahead. These sectors have benefitted from unorthodox economic policies in Argentina, but these policies are beginning to be unwound
...Uruguay is set to experience a period of structurally lower growth in the coming years, as investment into expanding agricultural produc- tion 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. ...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 pay- ments 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. ...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.
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