2026/05/16 | Diego Ciongo & Soledad Castagna
GDP grew 0.9% YoY in 1Q26, up from 0.1% YoY in 4Q25. At the margin, using the central bank’s seasonally adjusted series, GDP increased 0.8% QoQ/sa in 1Q26 – outperforming the monthly GDP proxy, which had pointed to a 1.1% QoQ/sa expansion. The statistical carryover for 2026 stood at 0.8%.
Mixed performance across sectors. On the supply side, annual growth was mainly supported by financial services (+3.1% YoY), transport (2.2% YoY), manufacturing (+1.3% YoY), and commerce (+1.4% YoY), the latter boosted by higher sales of grains. Tourism related services remained broadly unchanged compared to 1Q25. Conversely, the primary sector contracted 3.7% YoY in 1Q26 due to a weaker soybean and rice harvest amid drought conditions.
Domestic demand strengthened in 1Q26. Domestic demand (excluding inventories) rose 1.9% YoY in 1Q26, up from 1.5% gain in 4Q25. This was driven by a 2.9% YoY increase in consumption—supported by both private and public spending. Fixed gross capital formation decreased 3.1% YoY, largely reflecting lower investment in the construction sector. External demand strengthened: exports of goods and services rose 2.3% YoY (vs. -1.9% YoY in 4Q25), while imports rose 4.7% YoY (vs. +5.1% YoY in 4Q25), driven by cars, meat and durable goods.
Our take: We maintained our 2026 GDP growth forecast at 1.2%. While activity rebounded in 1Q26, we expect a moderation, as leading indicators for 2Q already suggest a loss of momentum. In fact, our own activity indicator (IDAT-Uy) posted a 1.0% YoY real increase in May, well below the 7.8% YoY growth recorded in 1Q26.