Uruguay Economy Facts
Uruguay’s economy is characterized by an export-oriented agricultural sector where soy is now a significant feature of traditional livestock farming. In addition, Montevideo is an important financial center and tourism is also important for the economy.
Breeding of cows and sheep, and exports of meat, wool and skins, have long dominated the economy. Uruguay is still one of the world’s leading exporters of mainly beef. During the 2000s, cultivated crops, especially soybeans, have become increasingly important, as are dairy products (see Agriculture and Fisheries). In addition, the country has become a leading exporter of cellulose (see Industry).
- Countryaah.com: Major imports by Uruguay, covering a full list of top products imported by the country and trade value for each product category.
Depending on a few agricultural products, the economy is sensitive to price fluctuations in the world market. Investments have therefore been made to develop other industries in the service sector.
Financial services and tourism
Montevideo has long been considered one of South America’s most important financial services centers. The country has a reputation for being a tax haven, but after criticism, banking secrecy has loosened and Uruguay was removed in 2011 from the economic cooperation organization OECD ‘s “gray list” of countries that do not cooperate sufficiently in respect of taxable account holdings.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including URU which represents the country of Uruguay. Check findjobdescriptions to learn more about Uruguay.
Since the turn of the millennium, tourism has accounted for between 10 and 20 percent of GDP. The fashionable Punte del Este is considered one of Latin America’s most luxurious destinations. Uruguay also attracts tourists with its miles of sandy beaches and its mild climate. The old colonial part of Colonia del Sacramento is included in the UN body UNESCO’s list of world heritage sites.
In 2013, Uruguay climbed past Chile and ranked best by Latin American countries on the organization Transparency International’s corruption index (see Democracy and Rights).
By the end of the 20th century, the economy was growing relatively slowly. In 1999, the country suffered severe economic problems, after Brazil devalued its currency, oil became more expensive and prices fell on Uruguay’s export goods. Bad weather hit agriculture and in 2001 the country was hit by foot-and-mouth disease, which led to temporary stops for meat exports.
The financial crisis 2002
The problems culminated as the financial crisis in Argentina spread to Uruguay. In 2002, gross domestic product (GDP) shrank by more than 10 percent and unemployment nearly doubled to 17 percent. Inflation accelerated and foreign debt doubled. The government was forced to release the fixed exchange rate of the Uruguayan peso against the US dollar, and the peso’s value fell sharply. As a result, the government ordered the banks to stay closed for a week to try to find a solution to the emergency crisis. By then, the central bank’s foreign exchange reserves had fallen to one-fifth of what it was. Uruguay was forced to receive emergency loans from the International Monetary Fund (IMF).
The cooperation with the IMF limited the effects of the crisis and the economic recovery went faster than expected. In 2004–2008, growth averaged 8 percent, thanks to increased domestic consumption, rising prices and increased demand for the country’s export products as well as greater tourist influx. A contributing factor to the rapid recovery was also that Uruguay has strong institutions – government, parliament and administration – that could implement the measures required by the IMF. In 2006, Uruguay had repaid the IMF loans from the crisis years early.
The global financial crisis of 2008–2009 slowed the growth rate again, but Uruguay still managed quite well and in 2010 growth was again up to almost 8 percent. It then fell again as a result of the slowdown in the world economy, and not least in Argentina and Brazil, which Uruguay is dependent on for export, investment and tourism. It was close to zero growth in 2015 before the curve gently turned up again.
FACTS – FINANCE
GDP per person
US $ 17,278 (2018)
US $ 59,597 million (2018)
1.6 percent (2018)
Agriculture’s share of GDP
5.6 percent (2018)
Manufacturing industry’s share of GDP
11.7 percent (2018)
The service sector’s share of GDP
60.8 percent (2018)
7.6 percent (2019)
Government debt’s share of GDP
63.5 percent (2018)
US $ 11 488 million (2018)
US $ 9,123 million (2018)
– US $ 348 million (2018)
Commodity trade’s share of GDP
28 percent (2018)
Main export goods
beef, cellulose, soybeans, milk products
Largest trading partner
China, Brazil, Argentina, USA