Uruguay - one to watch
Uruguay is often overlooked by those drawn to the brighter lights of
Argentina, but that could all be about to Change...
2008 was a poor year economically for many developed countries, but Latin
America had several star performers.
According to the United Nations Economic Commission for Latin America and the Caribbean
(ECLAC), high achievers in 2008 GDP growth were Brazil, Ecuador and Panama,
although Uruguay with its 11.5% increase outperformed the other 20 countries in
the ECLAC listing.
Recession
The 2001-2002 Argentinean crisis hit Uruguay hard and the country fell into
recession, but the prudent monetary policy followed since then has meant
Uruguay's economy has boomed while Argentina's has failed to take off.
Uruguay's secret was to devalue its currency, a move that led to a lower cost
of living and an attractive environment for foreign investment.
Argentineans have been particularly keen to invest in their neighbouring
country and foreign investment in Uruguay generally grew by a massive 25% in
2008. Foreign funds also poured into the country - non-resident deposits in
Uruguayan banks increased by over 40% last year.
As in the case in many countries, the future is by no means certain for Uruguay
in 2009 and it is unlikely that Uruguay will be immune to the global economic
slowdown in 2009.
That said, ECLAC predicts 4% GDP growth, far ahead of what most countries
expect to achieve this year and still considerably higher than the 1.9%
forecast for the region as a whole.
Cheaper than Europe
Uruguay's devalued currency and favourable foreign investment climate makes it
a country worth considering when it comes to property investment. Property
prices are considerably below those found in Europe and North America, and
Uruguay offers the additional advantage of a Southern hemisphere winter.
This has made Uruguayan beach resorts such as Punta del Este an ideal
destination for Europeans and North Americans escaping from the winter cold in
their home countries.
'Uruguay is certainly one to look at in a South American property portfolio,'
says James Gonzalez, Market Analyst at Obelisk Investment Property. 'Its
economy is strong and the property market offers interesting investment
opportunities. However, flights to Uruguay from Europe and North America are
not as frequent as they are to some other destinations in the region.'
Source: www.obeliskinvestmentproperty.com