Economy of Uruguay

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Economy of Uruguay
World Trade Center Montevideo
CurrencyUruguayan peso (UYU, $U)
Calendar year
Trade organizations
WTO, ALADI, Mercosur, Unasur, Andean Community (associate)
Country group
Statistics
Population 3,461,734 (2019)[3]
GDP
  • $55.711 billion (nominal, 2020 est.)[4]
  • $79.302 billion (PPP, 2020 est.)[4]
GDP rank
GDP growth
  • 1.6% (2018) 0.2% (2019e)
  • −5.9% (2020)[5] 3.0% (2021f)[4]
GDP per capita
  • $15,778 (nominal, 2020 est.)[4]
  • $22,459 (PPP, 2020 est.)[4]
GDP per capita rank
GDP by sector
9.12% (February 2021)[7]
Population below poverty line
 11.6% (2020)[8]
39.7 medium (2018, World Bank)[9]
Labor force
  • 1,686,487 (2020)[12]
  • 54.9% employment rate (February 2021)[13]
Labor force by occupation
Unemployment 11.1% (February 2021)[13]
Main industries
food processing, electrical machinery, transportation equipment, petroleum products, textiles, chemicals, beverages
101st (medium, 2020)[14]
External
Exports $11.41 billion (2017 est.)[6]
Export goods
beef, soybeans, cellulose, rice, wheat, wood, dairy products, wool
Main export partners
Imports $8.607 billion (2017 est.)[6]
Import goods
refined oil, crude oil, passenger and other transportation vehicles, vehicle parts, cellular phones
Main import partners
FDI stock
  • $44.84 billion (31 December 2017 est.)[6]
  • Abroad: $19.97 billion (31 December 2017 est.)[6]
$879 million (2017 est.)[6]
$28.37 billion (31 December 2017 est.)[6]
Public finances
65.7% of GDP (2017 est.)[6][note 1]
−3.5% (of GDP) (2017 est.)[6]
Revenues17.66 billion (2017 est.)[6]
Expenses19.72 billion (2017 est.)[6]
Foreign reserves
 $15.96 billion (31 December 2017 est.)[6]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of Uruguay is characterized by an export-oriented agricultural sector and a well-educated workforce, along with high levels of social spending. After averaging growth of 5% annually during 1996–98, Uruguay's economy suffered a major downturn in 1999–2002, stemming largely from the spillover effects of the economic problems of its large neighbors, Argentina and Brazil. In 2001–02, Argentine citizens made massive withdrawals of dollars deposited in Uruguayan banks after bank deposits in Argentina were frozen, which led to a plunge in the Uruguayan peso, causing the 2002 Uruguay banking crisis.

History​[edit]

In the 19th century, the country had similar characteristics to other Latin American countries: caudillismo, civil wars and permanent instability (40 revolts between 1830 and 1903), foreign capitalism's control of important sectors of the economy, a high percentage of illiterate people (more than half the population in 1900).

José Batlle y Ordóñez, President from 1903 to 1907 and again from 1911 to 1915, set the pattern for Uruguay's modern political development and dominated the political scene until he died in 1929. Batlle introduced widespread political, social, and economic reforms such as a welfare program, government participation in many facets of the economy, and a new constitution. Batlle nationalized foreign-owned companies and created a modern social welfare system. Income tax for lower incomes was abolished in 1905, secondary schools established in every city (1906), telephone network nationalized, unemployment benefits were introduced (1914), eight-hour working day introduced (1915), etc.[17]

Claudio Williman who served between Batlle’s two terms was his supporter and continued all his reforms, as did the next President Baltasar Brum (1919–1923). Around 1900 infant mortality rates (IMR) in Uruguay were among the world's lowest, indicating a very healthy population.

The number of trade unionists has quadrupled since 2003, from 110,000 to more than 400,000 in 2015 for a working population of 1.5 million people. According to the International Trade Union Confederation, Uruguay has become the most advanced country in the Americas in terms of respect for "fundamental labor rights, in particular, freedom of association, the right to collective bargaining and the right to strike".

Currency​[edit]

Uruguay has a partially dollarized economy. As of August 2008 almost 60% of bank loans use United States dollars,[18] but most transactions use the Uruguayan peso.[19] Today, the Uruguayan peso is minted in coins of 1, 2, 5, 10, and 50 pesos and in banknotes of 20, 50, 100, 200, 500, 1000, and 2000 pesos.

Sectors​[edit]

Agriculture, Textiles and Leather​[edit]

Throughout Uruguay's history, their strongest exporting industries have been beef and wool. In the case of beef exports, they have been boosted since Uruguay joined the Mercosur agreement in 1991 and the country has been able to reach more distant markets, such as Japan. In the case of wool exports, they have not been doing so well in recent years suffering from other competitors in the market like New Zealand and the fluctuations of its demand during the 2008/09 recession in the developed world. At the same time with timber refining being kept within the country, forestry has become a growth industry in recent years.In 2018, the country produced 1.36 million tons of rice, 1.33 million tons of soy, 816 thousand tons of maize, 637 thousand tons of barley, 440 thousand tons of wheat, 350 thousand tons of sugar cane, 106 thousand tons of orange, 104 thousand tons of grape, 90 thousand tons of rapeseed, 87 thousand tons of potato, 76 thousand tons of sorghum, 71 thousand tons of tangerine, 52 thousand tons of oats, 48 thousand tons of apple, in addition to smaller yields of other agricultural products.[20]Uruguay is also a major meat producer. In 2018, it produced 589 thousand tons of beef. [21]

Energy​[edit]

Uruguay imports crude and refined oil from other countries. It produces different types of petroleum products.

Uruguay is endowed with renewable energy resources and the country produces 95% of its electricity from alternative energy sources.[22]

Software​[edit]

During the last decades the software industry has developed considerably. Many start-ups have been very successful, such is the case of PedidosYa. Uruguay also exports software; the similar geographic longitude to that of the United States makes it attractive for companies to outsource software development to Uruguayan companies. Other notable Uruguayan software enterprises are: Genexus, Códigos del Sur, Overactive.[citation needed]

Mining​[edit]

Although this is a sector that does not make substantial contributions to the country's economy, in recent years there has been some activity in gold and cement production, and also in the extraction of granite.

Plastics​[edit]

Due to two major investments made in 1991 and 1997, the most significant manufactured exports in Uruguay are plastics. These investments laid the way for most of the substantial exports of plastic-based products which have taken a very important role in Uruguay's economy.

Telecommunications​[edit]

Despite having poor levels of investment in the fixed-line sector, the small size of Uruguay's population has enabled them to attain one of the highest teledensity levels in South America and reach a 100% digitalization of main lines. Although the telecommunications sector has been under a state monopoly for some years, provisions have been made to introduce liberalization and to allow for the entry of more firms into the cellular sector.

Travel & Tourism​[edit]

Main article: Tourism in Uruguay

In 2013, travel and tourism accounted for 9.4% of the country's GDP.[23] Their tourist industry is mainly characterized for attracting visitors from neighboring countries. Currently Uruguay's major attraction is the interior, particularly located in the region around Punta del Este. [24] [1][permanent dead link]

Specialties of Uruguay​[edit]

  • Cattle were introduced to Uruguay before its independence by Hernando Arias de Saavedra, the Spanish Governor of Buenos Aires in 1603. Beef exports in 2006 amounted to around 37% of Uruguayan exports.[25]
  • Wool is a traditional product exported mainly to America, followed by the UK and India.[26]
  • Milk and dairy products. Conaprole, National Cooperative of Milk Producers[27] is the main exporter of dairy products in Latin America (in 2006). The area of the country dedicated to dairy food is located mainly in the southwest.
  • Rice. Fine varieties are produced in the lowlands in the east of the country close to Merin lake on the Uruguay-Brazil border. The national company Saman claims to be the main exporter in Latin America.[28] Countries it exports to include Brazil, Iran, Peru, South Africa, Chile, Senegal, Argentina, Paraguay, Bolivia, Ecuador, USA, Canada and China.
  • Tourism: Several seaside resorts, like Punta del Este or Punta del Diablo in the south-eastern departments of Maldonado and Rocha, regarded as a jet-set resort in South America, are main attractions of Uruguay. International cruises call at Montevideo from October to March every year. Also, Uruguay hosts many year-round international conferences. (The original GATT Uruguay Round concerning trade was, as its name suggests, hosted in Uruguay). Montevideo is home to the headquarters (secretariat) of [Mercosur], the Common Market of the South, whose full members are Uruguay, Argentina, Brazil, Paraguay and Venezuela, associate members Bolivia, Chile, Colombia, Ecuador and Peru.
  • Software and consulting. Uruguay's well-educated workforce and lower-than-international wages have put Uruguay on the IT map. A product named GeneXus,[29] originally created in Uruguay by a company called ArTech, is noteworthy. Other important developers and consultants include De Larrobla & Asociados,[30] Greycon and Quanam.[31] Tata Consultancy Services has its headquarters for the Spanish speaking world in Uruguay. Many of these companies have established in Zonamerica Business & Technology Park.

"With a population of only three million, Uruguay has rapidly become Latin America's outsourcing hub. In partnership with one of India's largest technology consulting firms, engineers in Montevideo work while their counterparts in Mumbai sleep." - The New York Times, Sep 22, 2006.

  • Banking Services. Banking has traditionally been one of the strongest service export sectors in the country. Uruguay was once dubbed "the Switzerland of America", mainly for its banking sector and stability. The largest bank in Uruguay is Banco República, or BROU, which is state-owned; another important state bank is the BHU. Almost 20 private banks, most of the branches of international banks, operate in the country (Banco Santander, ABN AMRO, Citibank, among others). There is also a myriad of brokers and financial-services bureaus, among them Ficus Capital, Galvin Sociedad de Bolsa, Europa Sociedad de Bolsa, Darío Cukier, GBU, Hordeñana & Asociados Sociedad de Bolsa, etc. Uruguay has fully recovered from the financial crisis that caused a run on its banks.
  • Public Sector: The state in Uruguay has an important role in the economy, Uruguay resisted the trend of privatization in Utilities and state-owned enterprises in the region. Several Referendums supported the state being in control of the most important utilities and energy companies. Some of the companies have a full monopoly warranted by law (like landline telephony, water), others compete freely with private operators (Insurance, mobile telephony, Banks). Most of them are dominant in the local market. There is strong debate in the Uruguayan society about their role and future. Some of them contributed to the Uruguay state treasury.
    • The most important state-owned companies are: Republica AFAP (Pension Fund), AFE (Railways), ANCAP (Energy), ANCO (Mail), Administracion Nacional de Puertos (Ports), ANTEL (Telecommunications: Telephony, Mobiles (ANCEL and Data ANTELDATA)), BHU (Mortgage Bank), BROU (Bank), BSE (Insurance), OSE (Water & Sewage), UTE (Electricity). These companies operate under public law, using a legal entity defined in the Uruguayan Constitution called 'Ente Autonomo' (Meaning Autonomic Entity). The government also owns parts of other companies operating under private law like the National Airline Carrier PLUNA and others owned totally or partially by the CND National Development Corporation.

Trade Agreements​[edit]

Currently in force (Free Trade Agreements / Economic Complementation Agreements)
MERCOSUR (signed and effective November 1991)
ECA N.º 36 MERCOSUR with Bolivia (signed December 1996 and effective February 1997)
FTA with Mexico (signed November 2003 and effective July 2004)
ECAa N.º 59 with Ecuador (signed October 2004 and effective April 2005)
ECA N.º 58 MERCOSUR with Peru (signed August 2005 and effective December 2005)
ECA N.º 62 MERCOSUR with Cuba (signed July 2006 and effective September 2008)
Comercial Preference Agreement MERCOSUR with India (signed January 2004 and effective June 2009)
FTA MERCOSUR with Israel (signed December de 2007 and effective December 2009)
Partial Agreement N.º 63 with Venezuela (signed December 2012 and effective March 2013)
Comercial Preference Agreement MERCOSUR with SACU (signed September 2011 and effective April 2016)
FTA MERCOSUR with Egypt (signed December 2015 and effective September 2017)
ECA N.º 72 MERCOSUR with Colombia (signed July 2017 and effective December 2017)
FTA with Chile signed October 2016 and effective December 2018)
Concluded (not in force)
FTA MERCOSUR with State of Palestine (signed December 2011)

Raw Data​[edit]

The following table shows the main economic indicators in 1980–2017.[32]

Year GDP in $
(PPP) 		GDP per capita in $
(PPP) 		GDP growth
(real) 		Inflation
(in Percent) 		Unemployment rate
(in Percent) 		Poverty[33]

(in Percent)

Government debt
(Percentage of GDP)
1980 12.46 Bln. 4,240 6.0 % 63.5 % ... ... ...
1985 14.41 Bln. 4,749 1.5 % 72.2 %. 13.1 % ... ...
1990 20.33 Bln. 6,511 0.3 % 112.5 % 8.5 % ... ...
1995 27.81 Bln. 8,616 −1.4 % 42.2 % 10.3 % ... ...
2000 33.33 Bln. 9,952 −1.8 % 4.8 % 13.4 % 17.8 % ...
2005 38.42 Bln. 11,461 6.8 % 4.7 % 12.1 % 29.2 % 84 %
2006 41.23 Bln. 12,277 4.1 % 6.4 % 10.8 % 32.5 % 76 %
2007 45.09 Bln. 13,425 6.5 % 8.1 % 9.4 % 29.6 % 68 %
2008 49.28 Bln. 14,652 7.2 % 7.9 % 7.9 % 24.2 % 60 %
2009 51.76 Bln. 15,321 4.2 % 7.1 % 7.8 % 21.0 % 63 %
2010 56.48 Bln. 16,627 7.8 % 7.0 % 7.0 % 18.5 % 59 %
2011 60.62 Bln. 17,763 5.2 % 8.1 % 6.4 % 13.7 % 58 %
2012 63.92 Bln. 18,655 3.5 % 8.1 % 6.3 % 12.4 % 58 %
2013 67.96 Bln. 19,756 4.6 % 8.6 % 6.5 % 11.5 % 60 %
2014 71.42 Bln. 20,681 3.2 % 8.9 % 6.6 % 9.7 % 61 %
2015 72.47 Bln. 20,902 0.4 % 8.7 % 7.5 % 9.7 % 65 %
2016 74.45 Bln. 21,395 1.5 % 9.6 % 7.9 % 9.4 % 62 %
2017 78.15 Bln. 22,371 3.1 % 6.2 % 7.4 % 7.9 % 66 %
  • Industrial production growth rate: 12.6% (2006 est.)
  • Electricity - production: 9,474 GWh (1998)
    • fossil fuel: 3.91%
    • hydro: 95.62%
    • nuclear: 0%
    • other: 0.47% (1998)
  • Electricity - consumption: 6,526 GWh (1998)
  • Electricity - exports: 2,363 GWh (1998)
  • Electricity - imports: 78 GWh (1998)
  • Agriculture - products: wheat, rice, barley, maize, sorghum; livestock; fish
  • Exchange rates: Uruguayan pesos per US dollar - 24.048 (2006), 24.479 (2005), 28.704 (2004), 28.209 (2003), 21.257 (2002)

Uruguay in the world​[edit]

The following table shows the position of Uruguay in the world.

Index Source Rank Published
Quality of Living index Mercer[34] 77° (Montevideo) 2018
Human Development Index UNDP[35] 57° 2019
Democracy Index Economist Intelligence Unit[36] 15° 2019
Global Peace Index Vision of Humanity[37] 37° 2018
Prosperity Index Legatum[38] 30° 2018
Corruption Perceptions Index Transparency[39] 23° 2019
Economic Freedom Index Heritage[40] 40° 2019
Global Competitiveness Report World Economic Forum[41] 53° 2018
Cost of Living Index Expatistan[42] 45° 2019
Debt Rating[43] Moodys BAA2 2017
S&P BBB 2017
Fitch BBB- 2018
Developed Country Recognition World Bank High Income 2018
United Nations Very High HDI 2018
Index of Geopolitical Gains and Losses

after Energy Transition (GeGaLo Index)

Overland et al.[44] 6 out of 156 2019

See also​[edit]

Portals
Access related topics

Notes​[edit]

  1. ^ 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.

References​[edit]

  1. ^ "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 29 September 2019.
  2. ^ "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Retrieved 29 September 2019.
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  4. ^ Jump up to: a b c d e "World Economic Outlook database: April 2021". imf.org. International Monetary Fund. Retrieved 27 April 2021.
  5. ^ "Último informe disponible - Cuentas Nacionales Trimestrales" (in Spanish). Banco Central del Uruguay (Central Bank of Uruguay). 2021-03-24. Retrieved 2021-03-24.
  6. ^ Jump up to: a b c d e f g h i j k l m n o "The World Factbook". CIA.gov. Central Intelligence Agency. Retrieved 28 January 2019.
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  8. ^ "Estimación de la pobreza por el método de ingreso 2020". ine.gub.uy (in Spanish). Instituto Nacional de Estadística. 2021-03-25. Retrieved 2021-03-25.
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  10. ^ "Human Development Index (HDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 11 December 2019.
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  12. ^ "Labor force, total - Uruguay". data.worldbank.org. World Bank. Retrieved 27 April 2021.
  13. ^ Jump up to: a b "Actividad, Empleo y Desempleo". ine.gub.uy. Instituto Nacional de Estadística. Retrieved 27 April 2021.
  14. ^ "Ease of Doing Business in Uruguay". Doingbusiness.org. Retrieved 2017-01-23.
  15. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
  16. ^ Jump up to: a b c Rogers, Simon; Sedghi, Ami (15 April 2011). "How Fitch, Moody's and S&P rate each country's credit rating". The Guardian. London. Retrieved 28 May 2011.
  17. ^ Jermyn, Leslie; Wong, Winnie (2010). Uruguay. ISBN 9780761444824.
  18. ^ Piñón, Marco; Gelos, Gaston (2008-08-28). "Uruguay's Monetary Policy Effective Despite Dollarization". IMF Survey Magazine. Retrieved March 4, 2012.
  19. ^ Piñón, Marco; Gelos, Gaston; López-Mejía, Alejandro (editors) (2008). Macroeconomic Implications of Financial Dollarization: The Case of Uruguay. International Monetary Fund. p. 2. ISBN 978-1-58906-727-1.
  20. ^ Uruguay production in 2018, by FAO
  21. ^ Uruguay production in 2018, by FAO
  22. ^ Todd, Sarah. "Uruguay is now generating 95% of its electricity from renewable energy". Quartz. Retrieved 9 January 2020.
  23. ^ "Uruguay - Travel & Tourism Total Contribution to GDP - Total Contribution to GDP - % share". Knoema. Archived from the original on 4 March 2016. Retrieved 11 June 2015.
  24. ^ "Country Reports: Uruguay." Uruguay Country Monitor (2014): 16. Business Source Premier. Web. 7 Dec. 2014.
  25. ^ "Archived copy". Archived from the original on 2007-04-10. Retrieved 2007-02-13.
  26. ^ "Secretariado Uruguayo de la Lana". Archived from the original on 2020-07-26. Retrieved 2020-07-28.
  27. ^ "Conaprole". Archived from the original on 13 June 2015. Retrieved 11 June 2015.
  28. ^ "SAMAN. Principal exportador de Arroz de América Latina. The leading rice exporter in Latin America". Archived from the original on 10 May 2015. Retrieved 11 June 2015.
  29. ^ "Desarrollo de Aplicaciones Empresariales Multiplataforma - GeneXus". Archived from the original on 16 May 2015. Retrieved 11 June 2015.
  30. ^ "Bantotal". Archived from the original on 28 April 2015. Retrieved 11 June 2015.
  31. ^ "inicio - localhost". Archived from the original on 4 March 2016. Retrieved 11 June 2015.
  32. ^ "Report for Selected Countries and Subjects". Retrieved 2018-09-07.
  33. ^ "Pobreza - Instituto Nacional de Estadística". www.ine.gub.uy. Retrieved 2019-02-07.
  34. ^ "Mercer | Quality of Living Ranking 2018". www.mercer.com. Retrieved 2019-02-06.
  35. ^ "Human Development Data (1990-2018) | Human Development Reports". hdr.undp.org. Retrieved 9 January 2020.
  36. ^ "Democracy Index", Wikipedia, 2019-02-06, retrieved 2019-02-06
  37. ^ Humanity, Vision of. "Global Peace Index". Vision of Humanity. Retrieved 2019-02-06.
  38. ^ "Legatum Prosperity Index 2018 :: Legatum Prosperity Index 2018". www.prosperity.com. Retrieved 2019-02-06.
  39. ^ "Research - CPI - Overview". www.transparency.org. Retrieved 2019-02-06.
  40. ^ "Country Rankings: World & Global Economy Rankings on Economic Freedom". www.heritage.org. Retrieved 2019-02-06.
  41. ^ "Reports". World Economic Forum. Retrieved 2019-02-06.
  42. ^ "Cost of Living Index. Updated Aug 2019". Expatistan, cost of living comparisons. Retrieved 2019-02-06.
  43. ^ "Rating: Calificación de la deuda de Uruguay 2019". datosmacro.com (in Spanish). Retrieved 2019-02-06.
  44. ^ Overland, Indra; Bazilian, Morgan; Ilimbek Uulu, Talgat; Vakulchuk, Roman; Westphal, Kirsten (2019). "The GeGaLo index: Geopolitical gains and losses after energy transition". Energy Strategy Reviews. 26: 100406. https://doi.org/10.1016/j.esr.2019.100406

External links​[edit]

[show]
Automotive industry in Uruguay