MONTEVIDEO, Sept. 16 (Xinhua) -- Uruguay has shown improvements in some economic indices in the second quarter of 2009, and is expected to further improve its economy to weather the global financial crisis without recession.

    Uruguay's Ministry of Economy on Wednesday adjusted its GDP projection to 1.2 percent by the end of the year, 0.5 percent higher than the previous prediction, while growth is expected to reach 3.5 percent in 2010.

    The adjustment came after it was published that the GDP grew 0.5 percent in the second quarter, after a contraction of 2.3 percent in the first three months. In this way, Uruguay may avoid sliding into recession after six years of continuous GDP growth.

    "Most of the sectors show a recovery in the second quarter of the year," said a report from the Central Bank of Uruguay (BCU) on Tuesday.

    According to the report, industry activity rose 0.8 percent in the April-June period, construction 0.9 percent and commerce 0.1 percent.

    However, the agriculture-livestock sector, one of Uruguay's economic engines, saw a retraction of 0.7 percent. Drops in electricity, gas and water sectors also went up due to a reduction in electricity production.

    But Deputy Economy Minister Andres Masoller said Wednesday he was confident that the growth was likely to continue.

    He projected a growth increase of 1.5 percent in each quarter in the second half of 2009, adding that the Uruguayan economy "is of the few ones which have achieved dodging the recession."

    Pablo Rosselli, an analyst from Deloitte Consulting, observed that Uruguay's economy had "absorbed the crisis impact in a notoriously better way than we thought months ago."

    Rosselli told local daily El Observador that there were hints "pointing to the second half of the year to be better, with bigger growth rates."

    Economy Minister Alvaro Garcia, who is in Washington D.C. on an official visit, said the "stability" of his country was one of the causes for such a positive trend after the crisis.

    Under the government of President Tabare Vazquez, who took office in 2005, the economy was strengthened, reducing the country's financial, fiscal and social "vulnerabilities," Garcia added.

    "The worst part of the impact of the crisis on Uruguay was during the first quarter," Rafael Mantero, an analyst from the consulting firm CPA/Ferrere, said. He believed that the prospect for the future was encouraging.

    In 2008, Uruguay's GDP expanded for the sixth consecutive year, at 8.9 percent, despite an evident slowdown in the last quarter.

Special Report:  Global Financial Crisis