Economy of Uruguay

Economy of Uruguay

Currency	Uruguayan peso ($, UYU)
Fiscal year	Calendar year
Statistics
GDP	$47.8 billion (2010 est.)
GDP growth	7.1% (2010 est.)
GDP per capita	$13,600 (2010 est.)
GDP by sector	agriculture: 9.3%; industry: 22.8%; services: 67.9% (2010 est.)
Inflation (CPI)	6.8% (2010 est.)
Population below poverty line	13.7% (2009)
Gini coefficient	45.2 (2006)
Labour force	1.637 million (2010 est.)
Labour force by occupation	agriculture: 9%; industry: 15%; services: 76% (2007 est.)
Unemployment	7.4% (2010 est.)
Main industries	food processing, electrical machinery, transportation equipment, petroleum products, textiles, chemicals, beverages
External
Exports	$7.413 billion (2010 est.)
Export goods	meat, rice, leather products, wool, fish, dairy products
Main export partners	Brazil 21.05%, China 9.45%, Argentina 7.36%, Germany 5.16%, Mexico 4.88%, Netherlands 4.13%, United States 3.96% (2009)
Imports	$8.519 billion (2010 est.)
Import goods	crude petroleum and petroleum products, machinery, chemicals, road vehicles, paper, plastics
Main import partners	Argentina 20.77%, Brazil 17.53%, China 10.23%, U.S. 9.82%, Paraguay 6.87% (2009)
FDI stock	$4.19 billion (2007)
Gross external debt	$13.39 billion (31 December 2010 est.)
Public finances
Government debt	52.7% of GDP (2010 est.)
Revenues	$8.841 billion (2009 est.)
Expenses	$9.666 billion (2009 est.)
Foreign reserves	$7.407 billion (31 December 2010 est.)
All values, unless otherwise stated, are in US dollars.

Economy of Uruguay is characterized by an export-oriented agricultural sector, a well-educated work force, and high levels of social spending. After averaging growth of 5% annually during 1996-98, in 1999-2002 the economy suffered a major downturn, 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, a banking crisis, and a sharp economic contraction. Real GDP fell in four years by nearly 20%, with 2002 the worst year. The unemployment rate rose, inflation surged, and the burden of external debt doubled. Financial assistance from the IMF helped stem the damage. Uruguay restructured its external debt in 2003 without asking creditors to accept a reduction on the principal. Economic growth for Uruguay resumed, and 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 2.9% 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 exceeded 7% in 2010.

Specialties of Uruguay

• Cattle were introduced to Uruguay before its independence by Hernando Arias de Saveedra, the Spanish Governor of Buenos Aires in 1603. Beef exports in 2006 amounted to around 37% of Uruguayan exports.
• Wool is a traditional product exported mainly to America, followed by the UK and India.
• Milk and dairy products. Conaprole, National Cooperative of Milk Producers is the main exporter of dairy products in Latin America (in 2006). The area of the country dedicated to the dairy food is located mainly in the south west.
• 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. 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, originally created in Uruguay by a company called ArTech, is noteworthy. Other important developers and consultants include De Larrobla & Asociados, Greycon and Quanam. Tata Consultancy Services has its headquarters for the Spanish speaking world in Uruguay. Many of these companies have established in *Zonamerica Business & Technology Park - Uruguay

"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 Republica, or BROU. Almost 20 private banks, most of them branches of international banks, operate in the country (Banco Santander, ABN AMRO, Citibank, among others). There are also a myriad of brokers and financial-services bureaus, among them Ficus Capital, Galfin 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 made a contribution 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.

Raw Data

• GDP: purchasing power parity - $37.54 billion (2006 est.)
• GDP - real growth rate: 7% (2006 est.)
• GDP - per capita: purchasing power parity - $10,900 (2006 est.)
• Pop. below the poverty line: NA%
• GDP - composition by sector:
  • agriculture: 9.3%
  • industry: 33.7%
  • services: 57% (2006)
• Inflation rate (consumer prices): 6.5% (2006 est.)
• Labor force: 1.27 million (2006 est.)
• Unemployment rate: 7.5% (June 2009)
• Unemployed Population: 370,649 (2006 est.)
• Budget:
  • revenues: $5.203 billion
  • expenditures: $5.449 billion; including capital expenditures of $193 million (2006 est.)
• Industries: food processing, electrical machinery, transportation equipment, petroleum products, textiles, chemicals, beverages
• 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
• Exports: $3.993 billion f.o.b. (2006 est.)
• Exports - commodities: meat, rice, leather products, vehicles, dairy products, wool, electricity
• Exports - partners: Brazil 14%, US 12.3%, Argentina 8.2%, China 6.1%, Germany 5%, Russia 5%, Mexico 4.3% (2006)
• Imports: $4.532 billion f.o.b. (2006 est.)
• Imports - commodities: road vehicles, electrical machinery, metal manufactures, heavy industrial machinery, crude petroleum
• Imports - partners: Brazil 17.2%, Argentina 16.4%, US 8.9%, Paraguay 7.8%, China 7.5%, Venezuela 5.2%, Nigeria 4.8% (2006)
• Debt - external: $11.4 billion (30 September 2006 est.)
• Currency: 1 Uruguayan peso ($Ur) = 100 centesimos
• Exchange rates: Uruguayan pesos per US dollar - 24.048 (2006), 24.479 (2005), 28.704 (2004), 28.209 (2003), 21.257 (2002)
• Fiscal year: calendar year

See also

• Liebig Extract of Meat Company, which ran a very large and influential beef extract factory in Fray Bentos for 100 years
• Uruguay
• Economy of South America