Uruguay 

Uruguay country policy

Policy established 12 September 2006

• ILC, bank guarantee or central public guarantee (unconditional)
• The country ceiling is 1500 mln euro
• Early warning signal 100 mln euro
• - of which was used as at 2010-07-31 0 mln euro

Country class: 4

Uruguay country facts

Atradius DSB Economic Research

Country Report last updated 22 September 2008 
Country URUGUAY 

Political Situation
Stable

Head of state
President Tabaré Vazquez.

Form of government
Government of the left-wing Encuentro Progresista-Frente Amplio (EP-FA).

Internal Economic Situation
Good But Too High Inflation

General situation
Uruguay has overcome the 2002-crisis: fast GDP-growth thanks to flourishing agricultural/industrial exports, strong consumer demand and investments, a.o. FDI in two cellulose plants ($1.7 bn, =10% GDP). In 2008H1 real GDP-growth even reached a record 13.1%. Despite the negative impact of the road blockades on tourism/trade with Argentina, these FDI trigger knock-on effects on infrastructure and forestry. Fuel and food subsidies have subdued consumer inflation to 8% in July, still overshooting the upper limit of the CB-target range (7%). Low corruption: 25th on the TI Index. 
 
External Economic Situation
Good Liquidity; Improved Solvency

Main sources of foreign exchange
Agrarian products (meat, wool, skins), services, tourism.

Main foreign markets
EU (23%), USA (17%), Brazil (15%), Argentina (7%).

Main expenses of foreign exchange
Intermediate products, energy.

Balance of payments 
Despite fast growing export earnings (beef, dairy, industrial goods), high oil/soy prices and importgrowth have weakened the current account. However, the deficits are easily financed by FDI and private/multilateral lending, underpinning reserve accumulation. Since unpegging from the US$ in 2002 and the subsequent fall in exchange rate, the peso has remained firm since then.