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Economy of Uruguay
 
 
 

General

Uruguay experienced a major economic and financial crisis between 1999 and 2002, principally a spillover effect from the economic problems of Argentina. The economy contracted by 11%, and unemployment climbed to 21%. Despite the severity of the trade shocks, Uruguay's financial indicators remained more stable than those of its neighbours, a reflection of its solid reputation among investors and its investment-grade sovereign bond rating, one of only two in South America.

In 2004, the Batlle government signed a three-year $1.1 billion stand-by arrangement with the International Monetary Fund, committing the country to a substantial primary fiscal surplus, low inflation, considerable reductions in external debt, and several structural reforms designed to improve competitiveness and attract foreign investment. Uruguay terminated the agreement in 2006 following the early repayment of its debt but maintained a number of the policy commitments

Between the years 2007 and 2009, Uruguay was the only country in the Americas that did not technically experience a recession (two consecutive downward quarters). Unemployment reached a record low of 5.4% in December 2010 before rising to 6.1% in January 2011. While unemployment is still at a low level, the IMF observed a rise in inflationary pressures and Uruguay's GDP expanded by 10.4% for the first half of 2010.

Uruguay's greatest natural resource is its rich agricultural land, almost 90% of which is devoted to livestock raising. Cattle, sheep, horses and pigs are the major livestock animals. Grains for cattle fattening and human consumption make up the bulk of the harvested crops. Rice is the major food crop, followed by wheat and sugar cane. Corn is the principal feed concentrate. Oats, barley and grain sorghums are also grown, and oil crops (flaxseed and sunflower seed) and sugar beets are important. In the vicinity of Salto there are many orchards and vineyards.

Despite Uruguay's basically agricultural-pastoral economy, its dependence upon imports for most raw materials, and its lack of fuel resources, there is considerable industrialisation. The processing of agricultural and animal products accounts for about half of the manufacturing activity; Fray Bentos and Paysandú are noted for their meat-freezing and canning plants. Meat, wool, hides and skins constitute the majority of Uruguay's exports. Other manufactures include beverages, textiles, construction and building materials, chemicals, and petroleum and coal derivatives. A large refinery near Montevideo processes imported crude oil. Marble, stone and granite were long thought to be the only important mineral resources, but bauxite has become a significant resource. There are important hydroelectric plants on the Uruguay and Negro rivers. Fishing and forestry add to the country's economy.

Uruguay's magnificent beaches, such as those at Punta del Este, are great economic assets; tourists, chiefly vacationing Argentines, contribute much to the national income. The country's transportation facilities are extensively developed. The state owns the railway, as well as the power, telephone, oil refining and other industries; about 20% of the workers are on the government payroll. Brazil, Argentina, the United States and the European Union nations are the main trading partners. Uruguay is a member of Mercosur.

Uruguay's well-educated workforce and lower-than-international wages have put Uruguay on the IT map. Both local and international companies operate in the country, some of them with offices worldwide. A product named Genexus, originally created in Uruguay by a company called ArTech, is noteworthy. Other important developers and consultants include De Larrobla & Asociados, Grupo Quanam, and Urudata Software. Tata Consultancy Services has its headquarters for the Spanish speaking world in Uruguay. Many of these companies have established in Zona America Business and Technology Park, in the suburbs of Montevideo.

The growing, sale and consumption of cannabis was legalised in Uruguay on 11 December 2013. The law was voted at the Uruguayan senate on the same date with 16 votes to approve it and 13 against. Some political parties are seeking ways to get a referendum to withdraw the law.

Overview

Economy - overview : Uruguay has a free market economy characterised by an export-oriented agricultural sector, a well-educated work force, and high levels of social spending. Following financial difficulties in the late 1990s and early 2000s, economic growth for Uruguay averaged 8% annually during the period 2004-08. The 2008-09 global financial crisis put a brake on Uruguay's vigorous growth, which decelerated to 2.6% in 2009. Nevertheless, the country managed to avoid a recession and keep positive growth rates, mainly through higher public expenditure and investment, and GDP growth reached 8.9% in 2010 but fell to about 3.5% in 2012, the result of a renewed slowdown in the global economy and in Uruguay's main trade partners and Common Market of the South (Mercosur) counterparts, Argentina and Brazil. Uruguay has sought to expand trade within Mercosur and with non-Mercosur members. Uruguay''s total merchandise trade with Mercosur since 2006 has increased by nearly 70% to more than $5 billion while its total trade with the world has almost doubled to roughly $20 billion.
GDP (purchasing power parity) : $53.63 billion (2012 est.)
GDP (official exchange rate) : $49.24 billion (2012 est.)
GDP - real growth rate : 3.9% (2012 est.)
GDP - per capita (PPP) : $15,900 (2012 est.)
Gross national saving : 15.8% of GDP (2012 est.)
GDP - composition, by end use : household consumption: 68.7%

government consumption: 13.6%

investment in fixed capital: 22.1%

investment in inventories: -0.9%

exports of goods and services: 26.3%

imports of goods and services: -29.7% (2012 est.)
GDP - composition by sector : agriculture: 7.4%

industry: 20.9%

services: 71.8% (2012 est.)
Labour force : 1.691 million (2012 est.)
Labour force - by occupation : agriculture: 13%

industry: 14%

services: 73% (2010 est.)
Unemployment rate : 6% (2012 est.)
Population below poverty line : 18.6% (2010 est.)
Household income or consumption by percentage share : lowest 10%: 1.9%

highest 10%: 34.4% (2010 est.)
Distribution of family income - Gini index : 45.3 (2010)
Budget : revenues: $14.25 billion

expenditures: $15.63 billion (2012 est.)
Taxes and other revenues : 28.9% of GDP (2012 est.)
Budget surplus (+) or deficit (-) : -2.8% of GDP (2012 est.)
Public debt : 59.4% of GDP (2012 est.)

60% of GDP (2011 est.)

note: data cover general government debt, and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care and unemployment; debt instruments for the social funds are not sold at public auctions.
Inflation rate (consumer prices) : 8.1% (2012 est.)
Central bank discount rate : 9% (31 December 2012)

note: Uruguay's central bank uses the benchmark interest rate, rather than the discount rate, to conduct monetary policy; the rates shown here are the benchmark rates
Commercial bank prime lending rate : 11.2% (31 December 2012 est.)
Stock of narrow money : $5.32 billion (31 December 2012 est.)
Stock of broad money : $16.97 billion (31 December 2010 est.)
Stock of domestic credit : $16.86 billion (31 December 2012 est.)
Market value of publicly traded shares : $231 million (31 December 2011)
Agriculture - products : soybeans, rice, wheat; beef, dairy products; fish; lumber, cellulose
Industries : food processing, electrical machinery, transportation equipment, petroleum products, textiles, chemicals, beverages
Industrial production growth rate : 3.5% (2012 est.)
Electricity - production : 9.5 billion kWh (2011 est.)
Electricity - consumption : 7.96 billion kWh (2011 est.)
Electricity - exports : 19 million kWh (2011 est.)
Electricity - imports : 477 million kWh (2011 est.)
Crude Oil - production : 1,183 bbl/day (2012 est.)
Crude Oil - exports : 0 bbl/day (2010 est.)
Crude Oil - imports : 38,680 bbl/day (2010 est.)
Crude Oil - proved reserves : 0 bbl (1 January 2009 es)
Refined petroleum products - production : 43,440 bbl/day (2010 est.)
Refined petroleum products - consumption : 51,100 bbl/day (2011 est.)
Refined petroleum products - exports : 4,656 bbl/day (2010 est.)
Refined petroleum products - imports : 16,420 bbl/day (2010 est.)
Natural gas - production : 0 cu m (2011 est.)
Natural gas - consumption : 80 million cu m (2010 est.)
Natural gas - exports : 0 cu m (2011 est.)
Natural gas - imports : 80 million cu m (2011 est.)
Natural gas - proved reserves : 0 cu m (1 January 2013 es)
Current account balance : $-2.69 billion (2012 est.)
Exports : $9.89 billion (2012 est.)
Exports - commodities : beef, soybeans, cellulose, rice, wheat, wood, dairy products; wool
Exports - partners : Brazil 18.6%, China 17.9%, Argentina 6.2%, Germany 4.3% (2012)
Imports : $12.26 billion (2012 est.)
Imports - commodities : refined oil, crude oil, passenger and other transportation vehicles, vehicle parts, cellular phones
Imports - partners : China 16.4%, Brazil 14.9%, Argentina 14.6%, US 9.1%, Paraguay 7.3% (2012)
Reserves of foreign exchange and gold : $13.6 billion (31 December 2012 est.)
Debt - external : $16.02 billion (31 December 2012 est.)
Stock of direct foreign investment - at home : $17.76 billion (31 December 2012 est.)
Stock of direct foreign investment - abroad : $357 million (31 December 2012 est.)
Exchange rates : Uruguayan pesos (UYU) per US dollar - 20.311 (2012 est.); 19.314 (2011 est.); 20.059 (2010 est.); 22.568 (2009); 20.936 (2008)
Fiscal year : calendar year

 

 

 
 

 



 


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