Uruguay

In 1969 and 1970 the economy of Uruguay began to emerge from a prolonged period of absolute stagnation. The Government of President Pacheco Areco achieved an impres... Mostrar más + sive degree of economic recovery as the result of a thoroughgoing reform of the all-important livestock sector, successful implementation of difficult stabilization and incomes policies and the establishment of a greater degree of socio-economic consensus than had existed for Uruguay in many years. One of the most remarkable aspects of recent Uruguayan performance is the rapidity with which short-term debt in the form of rescheduled commercial and financial arrears accumulated in the mid "sixties" has been amortized. This has been accomplished through large net transfers of resources abroad, initially as the result of depressed import demand but more recently as the result of a sharp upturn in exports. Both in terms of internal reforms and long-term balance of payments outlook, Uruguay appeared to have made great progress in establishing the basis for a period of sustained economic growth. This report projects an average annual growth rate of almost 4 percent for Uruguay over the 1970-76 periods. The 4 percent growth target will permit consumption to increase at an annual average real rate of 3.8 percent. This will facilitate the visible improvement in living standards which is necessary to maintenance of a national consensus in support of development efforts. Uruguay's demographic growth rate is 1.2 percent annually. Thus, per capita consumption would increase at an annual rate of 2.6 percent over the projection period compared to an average annual decrease of 0.7 percent over the past decade. To achieve this growth rate, investment in fixed capital will have to average approximately 16 percent of gross domestic product (GDP) as compared to 11 percent in 1965-68 and to 14.6 percent in 1969. About 25 percent of such investment will be made directly by the public sector, indicating that the bulk of the increase in investment activity will have to be forthcoming from the rest of the economy and demonstrating the great need of the latter for access to adequate credit resources as well as for appropriate price incentives. Mostrar menos -