Uruguay WT/TPR/S/263/Rev.1 
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  I. ECONOMIC ENVIRONMENT 
(1) OVERVIEW  
1. The Uruguayan economy performed robustly duri ng the review period, with real GDP 
growing at an average annual rate of 6.2 pe r cent between 2005 and 2010, fuelled mainly by 
burgeoning domestic demand.  The international econo mic crisis had no more than a moderate effect 
on the Uruguayan economy, causing GDP growth to sl ow only in 2009 before returning to its rapid 
expansion path the following year.  As a result of the strong growth recorded during the review period, per capita GDP doubled to US$11,996 in 2010, and the poverty and unemployment rates both fell sharply 
2. Imports and exports of goods and services both surged during the review period.  On the 
export side, Uruguay benefited from a favourable extern al environment provided by high international 
prices for agricultural raw materials, and vigorous growth among the countries of the region. 
3. Uruguay has made substantial progress on fiscal consolidation since its last review in 2006 
and has significantly reduced and restructured its public debt.  Fiscal policy has remained focused on 
curbing expenditure and generating a primary surplu s;  and that objective was attained every year 
during the review period.  In 2007, the country em barked on a wide-ranging reform of the tax system, 
which abolished 14 taxes and introduced a pers onal income tax and a tax on the income of 
non-residents.  The reform has sought to make tax administration more efficient and reduce tax 
evasion. 
4. Uruguay has a monetary policy whose ultimate  objective is price stability;  and, since 
June 2011, the annual inflation target has been with in the range of 4 to 6 per cent.  Despite the 
implementation of a counter-inflationary moneta ry policy in 2006-2009, the consumer price 
index (CPI) gathered pace, rising to 9.2 per cent in  2008, as a result of higher international food and 
energy product prices.  The growth slowdown helped  to curb inflation in 2009, but price increases 
started to pick up again in 2010 and 2011, and in  October 2011 the annual increase in the consumer 
price index reached 7.9 per cent. 
5. Current account deficits on the balance of paymen ts have been held at moderate levels for 
most of the review period, fluctuating between 0. 4 and 2 per cent of GDP, except in 2009, when the 
gap widened to 5.5 per cent of GDP owing to a sharp increase in imports.  The external public 
debt/GDP ratio fell steeply during the review period,  from nearly 69 per cent in 2005 to 45 per cent in 
2010, reflecting the rapid GDP growth and appreciation of the Uruguayan peso. 
6. Uruguay's external trade (exports and imports  of goods and services) represented 50.9 per 
cent of GDP in 2010.  Total merchandise trad e doubled between 2005 and 2010, with growing 
imports slightly outpacing expor ts in annual terms.  Uruguay exports chiefly commodities (food and 
agricultural raw materials), whic h accounted for 75.6 per cent of total merchandise exports in 2010, 
while imports consist essentially of manufactured products (70 per cent of all imports).  Uruguay's 
main trading partners continue to be the other MERCOSUR countries, which absorb almost one third 
of its exports and supply 36.5 per cent of its impor ts.  Other important trading partners are the 
European Union, China and Russia.  Over the last few years, the North American countries have taken 
a decreasing share of Uruguay's exports, whereas Ch ina has grown in importance as a destination 
market, and particularly as a source of imports.  The healthy performance of the Uruguayan economy 
and a supportive legal framework contributed to the exponential growth of foreign investment flows 
into Uruguay between 2005 and 2010. WT/TPR/S/263/Rev.1 Trade Policy Review 
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  (2) MACROECONOMIC TRENDS  
(i) Production and employment 
7. The Uruguayan economy expanded vigorously during the review period, with real GDP 
growing by an average of 6.2 per cent per year  between 2005 and 2010 (Table I.1).  Growth was 
driven by burgeoning domestic demand in both of its components, but mainly by gross capital 
formation which grew by 10 per cent annually in real terms in 2005-2010.  Imports of goods and 
services increased by 9.6 per cent per year in real  terms over the same period, outpacing the average 
growth rate of the corresponding exports (6.4 per cen t per year).  For most of the review period, 
Uruguay benefited from a favourable external envir onment provided by high international prices for 
agricultural raw materials (albeit partly offset by high fuel prices) and brisk growth among the 
countries of the region.  At the same time, Urugua y's macroeconomic stability helped to underpin 
growth. 
8. The international economic crisis, whose e ffects on the emerging economies were felt in 
2009, had a moderate impact on the Uruguayan economy, only causing the pace of GDP growth to slow, albeit sharply (from 8.6 per cent in 2008 to 2.6 pe r cent in 2009).  This mainly reflected weaker 
activity in the primary, manufacturing and energy  sectors - the latter also suffering from a severe 
drought in 2009.  Nonetheless,  the Uruguayan economy rebounded strongly in 2010 (8.5 per cent 
growth in real terms) on the back of bur geoning domestic demand a nd exports;  and rapid 
GDP growth continued in the first three quarters of 2011 (7.5 per cent compared to the same period in 
2010), driven mainly by vigorous expansion in th e tourism sector.  This was accompanied by higher 
imports of goods and services, par ticularly consumer and capital goods. 
9. The sustained growth of the Uruguayan economy during the review period made it possible to 
double per capita GDP, which rose to US$11,996 in 2010 (Table I.2).  At the same time, the poverty 
rate dropped from 34.4 per cent in 2006 to 18.6 per cent in 2010
1, and the Gini coefficient decreased 
from 0.45 in 2004 to 0.42 in 2010, showing Urugua y to be one of the most equal societies in 
Latin America today.2 
10. The unemployment rate fell to unprecedented leve ls during the review period, posting a rate 
of 6.2 per cent in the second quarter of 2011 (Table I.1).  There have also been record levels of 
employment, improvements in job quality, and a conti nuous recovery in real wages, which rose by 
25.5 per cent in the period 2005-2010.3  The progress achieved on employment poses new challenges 
for the future, since some sectors of the economy ha ve a labour shortage, whic h is particularly acute 
in the case of skilled workers. 
Table I.1 
Main macroeconomic indicators, 2005-2011 
 2005 2006a2007a2008a 2009a 2010a 2011a
National accounts (Percentage variation, at constant prices) 
Real GDP (at 2005 prices)b 7.5 4.3 7.3 8.6 2.6 8.5 7.5
  Domestic demandc 5.8 79 6.7 12.3 -1.1 10.8 10.6
 Final consumption expenditurec 5.2 5.9 6.3 8.2 2.3 10.1 8.5
 Gross capital formationc 9.1 16.8 8.1 28.9 -12.7 13.2 19.0
                                                      
1 Online information from the World Bank, "Data:  By Country:  Uruguay".  Viewed on 
3 October 2011 at:  http://datos.bancomundial.org/pais/uruguay. 
2 Ministry of the Economy and Finance (2011a), and Yuravlivker, D.E. (ed.) (2010). 
3 Ministry of the Economy and Finance (2011a), and Central Bank of Uruguay (2011b). Uruguay WT/TPR/S/263/Rev.1 
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   2005 2006a2007a2008a 2009a 2010a 2011a
  Exports of goods and servicesc 16.0 3.2 7.4 10.0 2.5 9.1 6.3
  Imports of goods and servicesc 9.8 15.3 5.3 22.1 -8.6 16.5 15.3
 (Percentage of current GDP, unless indicated otherwise) 
  Domestic demand 98.1 101.9 101.0 104.5 99.1 99.2 n.a.
Final consumption expenditure 80.4 82.5 81.4 82.3 81.9 81.3 n.a.
Final consumption expenditure (pri vate) 69.4 71.2 70.1 70.4 68.9 68.6 n.a.
Final consumption expenditure (general government) 10.9 11.3 11.3 11.9 13.0 12.7 n.a.
Gross capital formation 17.7 19.4 19.6 22.3 17.2 17.9 n.a.
Gross fixed capital formation 16.5 18.6 19.0 20.4 18.8 18.8 n.a.
Public sector 3.4 3.9 4.7 5.1 5.7 5.4 n.a.
Private sector 13.2 14.6 14.3 15.3 13.1 13.4 n.a.
Changes in inventory 1.2 0.8 0.6 1.8 -1.6 -0.9 n.a.
  Exports of goods and services 30.4 29.6 28.5 29.1 26.7 25.9 n.a.
  Imports of goods and services 28.5 31.4 29.5 33.7 25.8 25.0 n.a.
  Net exports of goods and services 1.9 -1.9 -1.0 -4.5 0.9 0.8 n.a.
Unemployment rate (%)d 12.2 10.9 9.2 7.7 7.3 6.8 6.2
Inflation (Percentage variation) 
Consumer price index (CPI) 4.9 6.4 8.5 9.2 5.9 6.9 8.6
Interest rates (Percentage, unless indicated otherwise) 
Average interest rate on loans, Ur$ (end of period)e 27.6 26.9 22.3 27.5 26.6 22.7 17.8
Average interest rate on deposits, Ur$ (end of period)f 2.1 2.3 4.4 5.4 4.9 4.8 5.1
Interest rate spread, Ur$ (end of period) 25.5 24.6 17.9 22.0 21.7 17.9 12.7
Average interest rate on loans, US$ (end of period)e 7.2 7.6 6.6 6.9 5.6 5.3 5.0
Average interest rate on deposits, US$ (end of period)f 1.6 2.1 2.3 1.0 0.5 0.4 0.3
Interest rate spread, US$ (end of period) 5.6 5.5 4.3 5.9 5.1 4.8 4.7
Exchange rate        
Exchange rate (period average:  Ur$ per US$)g 24.5 24.1 23.5 20.9 22.6 20.1 n.a.
Exchange-rate variation (December-December)g -8.5 1.2 -11.9 13.3 -19.4 2.4 n.a.
Variation in the real effective exchange rate (D ecember-December) -8.9 4.5 -7.0 -7.4 -10.2 -0.4 n.a.
Variation in the real effective ex change rate with respect to the 
Arg$ (December-December) -6.1 5.2 -13.6 1.0 -25.9 0.7 n.a.
Variation in the real effective exch ange rate with respect to the R$ 
(December-December) 5.9 5.4 2.7 -19.1 9.4 3.8 n.a.
External sector (Percentage of current GDP, unless indicated otherwise) 
Current account 0.2 -2.0 -0.9 -5.5 -0.4 -1.2 -1.0
Net merchandise trade 0.1 -2.5 -2.3 -5.5 -0.9 -0.6 -2.4
Merchandise exports 21.7 22.2 21.4 22.8 20.5 20.0 20.5
Merchandise imports 21.6 24.7 23.6 28.3 21.3 20.7 22.9
Services balance 2.1 2.1 2.9 2.4 3.0 2.6 4.4
Capital and financial account 4.3 2.7 6.3 9.9 4.3 3.8 6.7
Direct investment 4.7 7.5 5.2 6.8 5.0 6.0 4.5
Other investment -5.0 -13.4 -3.7 4.9 1.6 -0.8 0.1
Errors and omissions -1.0 -0.8 -1.2 2.8 1.1 -3.6 3.1
Balance-of-payments position (variation in BCU reserve assets) 3.6 -0.1 4.2 7.2 5.1 -0.9 0.8
Terms of trade (percentage variation)h -6.1 1.6 2.3 -1.9 6.6 -0.3 n.a.
Merchandise exports (percentage varia tion) 20.0 16.6 15.9 39.1 -9.7 25.8 18.2
Merchandise imports (percentage varia tion) 25.4 30.5 15.2 56.1 -24.2 24.6 40.9
Exports of services (percentage variation) 18.0 5.8 32.1 24.2 -1.6 16.0 34.7
Imports of services (percentage variation) 19.5 4.2 15.5 34.8 -15.3 21.7 24.7
BCU gross international reserves (US$ million, e nd of period) 3,031 3,133 3, 775 7,356 6,946 7,757 n.a.
Gross external debt (US$ million)i 11,418 10,560 12,218 12,021 13,935 14,626 15,655
Gross external debt/GDP (%) 68.7 54.7 53.2 38.6 44.8 45.0 69.1WT/TPR/S/263/Rev.1 Trade Policy Review 
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   2005 2006a2007a2008a 2009a 2010a 2011a
External debt service/Exports of goods and services (%)j 38.6 87.8 18.4 16.7 13.5 16.0 n.a.
n.a. Not available. 
a Preliminary figures. 
b Figures for the first two quarters;  percen tage variation with respect to the same period in the previous year.  GDP figures for the 
first three quarters. 
c Percentage variation in 2005 with respect to 2004 calcula ted using constant 1997 price data from the Central Bank of 
Uruguay (BCU). 
d Persons of 14 years of age or older, who were not working because they did not have  a job but were seeking paid or gainful 
work, as a percentage of the economically active population. 
e Annual effective interest rate, monthly weighted average, ex cluding transactions relating to restructured operations.  Intere st-rate 
movements may reflect changes in weightings, owing to variations  in the relative share of each institution.  The total banking 
system includes the Bank of the Eastern Republic of Urugua y (BROU), the Uruguayan Mortgage Bank (BHU), private banks, 
financial intermediation cooperatives, and fi nance houses that were active on each date. 
f Annual effective interest rate, monthly weighted average of fixed-term deposit ope rations, excluding, in the cases of the 
BROU and the National Savings and Loan Cooperative (COFAC ), those linked to the deposits reprogrammed by Law 
No. 17.523 of 4 August 2002.  The total banking system include s the BROU, the BHU, private banks, financial intermediation 
cooperatives, and finance houses that were active on each date.  Th e deposit interest rate corresponds to the average of fixed- term 
operations for all maturities, including those of 367 days or more. 
g Data from the IMF, International Financial Statistics  (IFS), June 2011. 
h Data from the IMF, "Uruguay:  2010 Article IV Consultation".  IMF Country Report No. 11/62 , March 2011. 
i Excludes deposits by non-residents. j External debt service includes am ortization and interest payments. 
Source :  Central Bank of Uruguay;  National Institute of  Statistics;  International Monetary Fund (IMF), International 
Financial Statistics  (IFS) database, June 2011;  and IMF (2011) , "Uruguay:  2010 Article IV Consultation", 
IMF Country Report No. 11/62 , March 2011. 
(ii) Structure of the economy 
11. The sectoral structure of the Uruguayan econom y remained broadly unchanged throughout 
the review period (Table I.2).  Services, as a whol e, continue to be the leading sector, contributing 
57.7 per cent of GDP (at current prices) in 2010,  followed by manufacturing (13.1 per cent) and 
agriculture, livestock, hunting and forestry (8.2 per cent).  Within the service s sector, the commerce, 
restaurants and hotels subsectors made the largest contribution to GDP (14.4 per cent), followed by 
real estate and business activities (14.5 per cent). 
12. Between 2005 and 2010, the most dynamic subsector was transport, storage and 
communications, which posted annual average growth of 17.8 per cent (at constant prices), mainly 
driven by the vigorous expansion of telecommunicati ons.  The next most important subsectors were 
commerce, restaurants and hotels (9.2 per cent)  and mining (9.1 per cent).  Agriculture and 
manufacturing performed less strongly during the period, although manufacturing industries bounced back from the 2010 activity level both in branches pr oducing largely for the external market (such as 
cellulose, wood and rubber products and motor vehicles), and in those supplying the domestic 
market.
4 
13. The services sector remains the economy's la rgest job-provider, accounting for over 
two thirds of total employment in 2010 - albeit a sma ller share than in 2005 (Table I.2).  Within the 
services sector, the leading subsector was again co mmerce, restaurants and hotels, which accounted 
for 21.5 per cent of employment in 2010, followed by financial intermediation, real estate and 
business activities.  Manufacturing industries, along with electricity, gas and water supply, accounted 
for 14.0 per cent of total employment in 2010 (compa red to 15.0 per cent in 2005), while agricultural 
and fishery activities and mining and quarrying cont ributed 11.5 per cent - more than double the 2005 
figure. 
                                                      
4 Central Bank of Uruguay (2010a). Uruguay WT/TPR/S/263/Rev.1 
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  Table I.2 
Structure of GDP and employment, 2005-2011 
 2005 2006a2007a2008a2009a 2010a 2011a,b
Current GDP (Ur$ million) 425,018 476, 707 560,412 653,136 706, 883 807,685 865,818
Current GDP (US$ million) 17,363 19,802 23,877 31,177 31, 322 40,265 45,094
Real GDP (Ur$ million at 2005 prices) 425,018 443,402 475,922 516,834 530,176 575,069 n.a.
Real GDP (US$ million at 2005 prices ) 17,363 18,114 19,442 21,114 21,659 23,493 n.a.
Per capita GDP at current prices (US$)c 5,222 5,947 7,151 9,309 9,319 11,996 13,381
Structure of GDP by economic sectors  (Percentage of GDP at current prices) 
Agriculture, livestock, hunting and forestry 8.5 8.0 8.6 9.2 8.2 8.2 8.4d
Fishing 0.2 0.3 0.2 0.1 0.1 0.1 n.a.
Mining 0.2 0.3 0.3 0.4 0.3 0.3 n.a.
Manufacturing 14.9 15.3 14.3 15.9 14.5 13.1 12.9
Electricity, gas and water supply 3.1 2.0 3.3 0.6 1.5 3.2 1.5
Construction 5.5 5.9 6.1 6.5 7.0 7.2 7.3
Services 56.7 56.8 56.5 56.9 58.4 57.7 50.5
Commerce, restaurants and hotels 12.7 13.0 13.7 15.0 14.4 14.4 14.5
Transport, storage and communication 8.3 8.1 7.6 7.3 6.9 6.7 6.4
 Land transport and transport by pipelines  2.8 2.7 2.5 2.2 2.3 2.2 n.a.
 Air and maritime transport 0.7 0.4 0.6 0.7 0.4 0.4 n.a.
 Supporting and auxiliary transport services 1.6 1.7 1.6 1.8 1.6 1.6 n.a.
 Communications 3.2 3.3 2.9 2.7 2.7 2.4 n.a.
Financial intermediation 5.4 5.1 4.7 4.2 4.2 4.2 n.a.
Real estate, renting and business act ivities 13.7 13.8 13.8 13.6 14.4 14.5 n.a.
Public administration and defence;  compulsory 
social security 4.9 5.0 5.0 4.9 5.4 5.1 n.a.
Education 3.4 3.5 3.5 3.8 4.3 4.1 n.a.
Health 4.6 4.7 4.6 4.8 5.2 5.1 n.a.
Personal services and private households with 
domestic employees 3.7 3.7 3.6 3.4 3.6 3.4 n.a.
Financial intermediation services indirectly measured, not distributed -2.5 -2.7 -2.8 -2.4 -2.4 -2.4 -2.7
Product taxes net of subsidies 13.3 14.1 13.6 12.7 12.5 12.7 13.0
Percentage variation in GDP (At constant 2005 prices) 
Agriculture, livestock, hunting and forestry 32 3.1 -6.2 5.7 3.7 1.1 1.8d
Fishing 3.6 15.7 -25.4 -1.3 -33.8 -12.2 n.a.
Mining 20.9 21.4 13.3 10.1 -2.5 4.6 n.a.
Manufacturing 14.2 8.1 7.1 17.3 -3.7 3.7 2.9
Electricity, gas and water supply 6.1 -28.6 57.8 -52.6 10.9 90.2 -31.3
Construction 14.7 9.2 6.2 8.5 1.4 4.3 0.0
Services 5.1 3.9 8.1 11.3 4.5 8.3 n.a.
  Commerce, restaurants and hotels 7.3 6.8 13.4 11.3 0.6 14.8 6.6
  Transport, storage and communication 16.7 8.2 18.1 35.5 14.4 14.6 11.1
Land transport and transport by pipelines 7.0 6.4 7.7 9.7 2.6 4.6 n.a.
Air and maritime transport 12.8 -31.5 83.4 39.8 -16.1 11.8 n.a.
Supporting and auxiliary transport se rvices 5.4 13.4 5.8 12.9 -5.4 17.3 n.a.
Communications 27.7 15.8 24.0 62.1 30.6 18.1 n.a.
Financial intermediation 4.4 -6.0 0.4 12.4 5.0 10.3 n.a.
Real estate, renting and business services 2.0 3.2 4.5 1.6 0.0 2.8 n.a.
Public administration and defence;  compulsory 
social security 0.4 4.2 3.0 0.6 4.8 -1.2 n.a.
Education 0.0 3.8 4.4 7.7 3.8 0.3 n.a.
Health 2.3 3.8 2.1 8.8 3.5 0.9 n.a.WT/TPR/S/263/Rev.1 Trade Policy Review 
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   2005 2006a2007a2008a2009a 2010a 2011a,b
Personal services and private households with 
domestic employees 2.8 0.9 6.2 2.9 4.2 3.4 n.a.
Financial intermediation services indirectly measured, not distributed -6.2 3.9 15.1 22.2 8.4 11.3 22.4
Product taxes net of subsidies 9.1 8.0 7.4 6.0 2.8 12.5 11.2
Structure of employment by economic 
activity (Percentage) 
Agriculture, livestock, hunting, forestry, fishing;  
and mining and quarrying 4.6 10.7 10.6 17.1 11.1 11.5 10.1
Manufacturing;  electricity, gas and water 
supply 15.2 14.8 14.8 13.4 14.0 14.0 13.9
Construction 6.7 6.3 6.7 8.5 6.8 7.3 7.3
Services 73.5 68.2 67.8 60.9 68.1 67.1 68.7
Commerce, restaurants and hotels 22.9 21.9 21.6 20.2 21.8 21.5 21.4
Transport, storage and communication 5.5 5.3 5.6 4.5 5.7 5.4 5.9
Financial intermediation, real estate, renting and business activities 9.3 7.2 7.7 5.3 8.3 8.4 8.6
Public administration and defence, compulsory social security 7.7 7.4 6.4 5.8 6.0 5.9 5.9
Education 6.1 5.7 5.8 5.7 5.6 5.6 6.1
Social services and health 7.3 6.8 6.7 5.4 7.0 7.0 7.4
Sewage and refuse di sposal, sanitation and 
similar activities;  extra- territorial organizations 
and bodies  5.8 4.9 5.1 4.6 5.0 4.7 4.9
Private households with domestic employees 8.9 9.0 8.9 9.4 8.7 8.6 8.4
n.a. Not available. 
a Preliminary figures. 
b Preliminary figures for the first two quarters;  percentage ch ange on the same period in the previous year.  For GDP and per 
capita GDP, data from the rolling 12- month period ending in June 2011. 
c Population data:  IMF, except 2010:  Projecti on by the National Institute of Statistics. 
d Includes agriculture, livestock, hunting, fore stry and fishing; a nd mining and quarrying. 
Source : Central Bank of  Uruguay;  National Institute of Statistics;  and IMF,  IFS database, June 2011. 
(3) FISCAL POLICY  
14. The Ministry of the Economy and Finance (MEF) is responsible for defining and 
implementing fiscal policy.  The maintenance of  macroeconomic equilibria, including the fiscal 
balance, is a fundamental pillar of the Government's  strategy for growth and development with equity, 
hence the MEF's commitment to maintain a prudent and responsible fiscal policy. 
15. Uruguay achieved further fiscal consolidation during the review period, including a major 
reduction and restructuring of the public debt, a lthough a substantial balance remains outstanding.  
It also embarked on a wide ranging reform of the tax system, with the enactment of the Tax Reform 
Law (No. 18.083 of 18 January 2007), which entered into force in July 2007.5  The main changes 
included the abolition of 14 taxes, the introduction of  the personal income tax (IRPF) and the tax on 
income of non-residents (IRNR), as well as reduc tions in the tax rates on income from economic 
activities (IRAE) and value added tax (VAT).  The reform has helped to make tax administration 
                                                      
5 The key objectives of the 2007 tax reform and subsequent amendments, were to achieve a fairer 
income distribution;  simplify, rationalize and modernize the tax system;  achieve efficient revenue collection;  
and encourage productive investments. Uruguay WT/TPR/S/263/Rev.1 
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  more efficient, reduce tax evasion and strengthen the culture of compliance with tax obligations.6  
The authorities have also noted positive effects in  terms of the fairness of income distribution.7 
16. Fiscal policy has traditionally targeted curbing expenditure to generate a primary surplus, 
thereby making it possible to meet the country’s large public-debt interest payments.  Progress was 
made on this in the first few years of the review  period, but in 2008-2009 the primary surplus shrank 
somewhat along with the overall public-sector balance (Table I.3).  This reflected a combination of factors, including a severe drought that rai sed the costs of electric power generation
8, lower than 
expected revenue, and the application of a counter cyc lical fiscal policy to cope with the effects of the 
international economic crisis. 
17. The fiscal policy framework has been st rengthened through the National Budget 
Law 2010-2014 (Law No. 18.719) passed in December 2010.   This legislation sets fiscal targets to 
gradually reduce the public sector deficit to below 1. 0 per cent of GDP by the end of the period, with 
the accent placed on reducing the public debt to 40 per cent of GDP by 2014 and increasing 
expenditure on infrastructure, education, security and social programmes.  The law also creates the 
Energy Stabilization Fund (FEE), which aims to re duce the effect of water shortages on the country's 
public finances, and minimize the risks of sharp fluctuations in electricity prices.9  In 2010, the fiscal 
targets set in the National Budget Law were fulfille d;  and financial savings of US$150 million were 
generated, which were used to finance the FEE. 
18. In 2010, the public-sector primary surplus grew to 1.9 per cent of GDP, while the overall 
balance posted a small deficit of 1.1 per cent of GDP (Table I.3).  In that year, the income of the 
non-financial public sector (NFPS) represented 29.2 pe r cent of GDP - up by 1.2 percentage points, 
mainly as a result of stronger earnings in the St ate electricity company (UTE) thanks to more 
favourable weather conditions.  Cent ral Government income was equivalent to 20.7 per cent of GDP, 
with income from external trade accounting for just 1.0 per cent of GDP.  Total public expenditure 
grew moderately, and current primary outgoings (cen tral Government and the Social Security Bank) 
increased by 0.2 GDP percentage points from the 2009 level, to reach 24.0 per cent of GDP.10   
Investment expenditure was up by 13.0 per cent in real terms on the 2009 level, and represented 
3.5 per cent of GDP, mainly corresponding to the Mi nistry of Housing, Land Management and the 
Environment.11 
                                                      
6 The rate of tax evasion decreased from 32 per cent in 2004 to 15 per cent in 2009.  Significant 
improvements were also made in revenue efficiency (IMF, 2011). 
7 Ministry of the Economy and Finance (2011). 
8 Uruguay experienced a severe drought in 2008, which reduced hydropower generating capacity, while 
the rise in oil prices meant that its energy needs had to be satisfied through costly imports.  Given that the 
highest energy generating costs were not passed on to consumers, the resulting fiscal costs represented about 6.1 per cent of GDP, and the financial situation of  the State electricity company (UTE) deteriorated 
(Yuravlivker, D.E. (ed.), 2010). 
9 The IMF supports the broad elements of the National Budget Law 2010-2014;  nonetheless, in view 
of the stage of the business cycle in Uruguay and the uncertain outlook for the global economy, it recommends 
adopting more conservative fiscal targ ets that would help ensure a soft landing for the economy, by reducing 
pressure for currency appreciation and reducing the debt more quickly (IMF, 2011). 
10 If the exceptional expenses involved in setting up the FEE, which was counted as a government 
transfer, is excluded, the level of expenditure in 2010 was virtually unchanged in relation to 2009. 
11 Ministry of the Economy and Finance (2011a). WT/TPR/S/263/Rev.1 Trade Policy Review 
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  Table I.3 
Financial accounts of the non-financial public sector (NFPS), 2005-2011 
(Percentage of GDP and US$ million) 
2005 2006 2007 2008 2009a 2010a 2011a,b 
(Percentage of current GDP) 
NFPS income 28.0 28.0 28. 0 26.2 28.0  29.2  28.7 
Central Government 20.9 21.4 20.6 20.0 20.5  20.7  21.3 
Directorate-General of Taxation (DGI) 15.9 16.6 16.2 16.6 17.1  17.0  17.9 
Tax on personal remuneration (IRP) 0.8 0.9 0.6 0.0 0.0  0.0  0.0 
Foreign trade 1.2 1.3 1.3 1.1 1.0  1.0  1.1 
Other 3.0 2.6 2.5 2.3 2.4  2.7  2.4 
Social Security Bank (BPS)c 5.0 5.3 5.1 5.3 6.1  6.2  6.6 
Current primary balance, public enterprises 2.1 1.4 2.4 0.8 1.4  2.2  0.8 
NFPS expenditure 24.2 24.6 24.8 25.1 27.2  27.5  26.7 
Current primary expenditure (central Government and 
BPS) 21.9 22.0 21.9 21.8 23.8  24.0  24.3 
Investmentsd 2.3 2.6 2.9 3.3 3.4  3.5  2.5 
Primary balance, administrative entitiesd 0.2 0.4 0.2 0.1 0.3  -0.0  0.3 
Primary balance, State Insurance Bank (BSE)e 0.2 -0.0 0.2 0.2 0.2  0.4  0.4 
NFPS primary balance 4.1 3.8 3.7 1.5 1.2  2.0  2.8 
Public sector primary balance 4.0 3.6 3.5 1.3 1.1  1.9  2.7 
Interest 4.4 4.2 3.5 2.9 2.8  2.9  3.0 
Public sector overall balance -0.4 -0.5 0.0 -1.5 -1.7  -1.1  -0.3 
(US$ million, unless i ndicated otherwise) 
Total gross public debt 13,949 13,717 16,319 16,534 21,891  23,024  25,982 
Central Government 11,318 11,299 12,774 12,789 15,687  15,462  17,901 
Other 2,631 2,418 3,545 3,746 6,203  7,562  8,082 
Total gross public debt (% of GDP) 80.3 69.3 68.3 53.0 69.9  57.2  n.a. 
n.a. Not available. 
a Preliminary figures. 
b Figures corresponding to the first two quarters. c Shown net of certificates as from August 2007.  Previ ously, BPS certificates were subtracted in the IRP row. 
d Includes investments by public enterprises.  The figure for July 2006 contains US$86 million of investments by the National 
Ports Authority (ANP), among others, in projects that will alter the fiscal target agreed upon with the IMF.  ANP execution 
includes US$67 million in August and US$26 million in November in the same category. 
e Primary balance by sources of financing ( Source :  BCU up to February 2011, MEF estimates for March and April 2011). 
Source : Online information from the MEF:  http://www.mef.gub.uy/indicadores.php;  and online information from the 
Central Bank of Uruguay:  http ://www.bcu.gub.uy/Estadis ticas-e-Indicadores/Paginas/Default.aspx. 
19. During the review period, there was a significan t reduction in the public debt/GDP ratio, as 
well as improvements in the composition of the debt  and a reduction in its e xposure to exchange-rate 
risk.  This was the result of a proactive policy impl emented by the Debt Management Unit (created in 
the MEF in late 2005), supported by strong economic gr owth and the real appreciation of the domestic 
currency over the last few years.  The total gross debt of the public sector shrank from 80.3 per cent of 
GDP in 2005 to 57.2 per cent in 2010, despite increasi ng in absolute amount (Table I.3).  In terms of 
restructuring, the average maturity period was lengthe ned;  most of the debt is now subject to fixed 
interest rates, and it is being progressively de-d ollarized.  The proportion of the total public debt 
denominated in foreign currency decreased from cl ose to 90 per cent in 2004 to 65 per cent in 
mid-2010.12  Interest payments also fell in relation to  GDP in the review period, despite a slight 
upturn to 2.9 per cent of GDP in 2010.  The central Government's financing needs over the 
                                                      
12 IMF (2011). Uruguay WT/TPR/S/263/Rev.1 
 Page 9 
 
 
  last few years, although substantial, have generally  been manageable;  and they have been funded 
through loans from multilateral organizations and debt issues. 
20. The situation in 2011 trended towards consolidatio n of the surplus in the first few months of 
the year;  and in the 12 months ending in Septem ber 2011, the central Government's primary balance 
(including the Social Security Bank) amounted to 0.7 per cent of GDP.13  This reflected lower 
expenditure, owing to weaker growth of outlays in respect of remunerations and liabilities, which 
more than compensated for the quicker pace of growth of investments, non-payroll expenses and 
transfers, supported by income growth.  The la tter included higher revenue  from VAT on imports, and 
income obtained through the Specific Internal Tax (IMESI) levied on sales of tobacco and motor 
vehicles (Chapter III(2)(v)). 
(4) MONETARY AND EXCHANGE RATE POLICY  
21. The monetary and foreign exchange regime  in Uruguay is the responsibility of the 
Macroeconomic Coordination Committee.14  The Central Bank of Uruguay (BCU), which has 
technical, administrative and financial autonomy un der the Constitution of the Republic and its own 
Constitutional Charter, is responsible for managing m onetary instruments to keep inflation rates as 
close as possible to the targets set  by the Committee.  The Central Bank also regulates the functioning 
and supervision of the country's payment and financial systems.15 
22. To fulfil the goal of price stability, Uruguay implem ents an inflation-targets regime, officially 
in effect since 2005.  The inflation target is define d as a range for an 18-month period, which has been 
set between 4 and 6 per cent since June 2011. 
23. Although the monetary base was the instrumental variable initially used by the BCU, since 
2007 monetary policy has been managed by setting a monetary-policy interest rate ( tasa de política 
monetaria  (TPM)), in line with usual practice among c ountries that operate inflation-targeting.  
Meeting as the Monetary Policy Committee (COPOM ) on a quarterly basis, the BCU analyses the 
inflationary situation and state of expectations , along with the macroeconomic climate and potential 
future scenarios.  The COPOM draws on this analysis to set the TPM so as to keep inflation within the 
target range over the period mentioned;  and the BCU intervenes on the overnight money market to 
keep the average market rate ( tasa media de mercado  (TMM)) as close as possible to the TPM. 
24. The BCU has made active use of the TPM sin ce its introduction in September 2007 to contain 
inflation, maintain the desired level of liquidi ty in the economy, and control economic agents' 
expectations of future inflation.16  Between September 2007 and Marc h 2009 the rate was raised on 
several occasions, from 5 per cent initially to 10 pe r cent;  and this was follo wed by a phase of falling 
rates, mainly to expand liquidity with a view to al leviating the effects of th e global financial crisis.  
This second stage lasted from March 2009 to Sept ember 2010, in which the TPM was lowered from 
10 to 6.25 per cent.  Lastly, since September 2010, with inflation gathering pace again, the rate was increased three times, to reach a le vel of 8 per cent in October 2011. 
                                                      
13 Ministry of the Economy and Finance (2011b). 
14 This Committee comprises the MEF and the BCU.  Its main objectives are to define the 
foreign-exchange regime and inflation target, and to coordinate fiscal and monetary policy actions. 
15 Online information from the BCU.  Viewed a t:  http://www.bcu.gub.uy/Paginas/Default.aspx. 
16 As pointed out by the BCU, the money supply is endogenous in regimes that use the interest rate as 
the monetary policy instrument, such as in Uruguay.  Nonetheless, analysis of the trend of the quantity of money 
is not completely ignored, since it may be useful for de tecting inflationary pressures that are implicit in the 
short-term balances (BCU, 2011b). WT/TPR/S/263/Rev.1 Trade Policy Review 
Page 10 
  
  25. In fulfilling its mandate to control inflation, a nd to strengthen the effect of the rise in the 
TPM, in May 2011 the BCU increased the average requi red reserve ratio on the liabilities of financial 
intermediaries, and introduced a marginal reser ve requirement on liabilities exceeding the daily 
average of total liabilities for the month of Ap ril 2011, specifying differentiated quotas for 
Uruguayan pesos and foreign currency.17 
26. Although a de-dollarization process has been under way in the economy for the last few 
months, a large proportion of deposits in the Urugua yan financial system continue to be denominated 
in dollars.  As of May 2011, 70 per cent of depo sits were still being held in foreign currency, 
compared to 90 per cent in 2005, as recorded in the previous report. 
27. The spread between interest rates on loans and deposits in domestic currency remained large 
during the review period, despite narrowing from 25.5 per cent in 2005 to 12.7 per cent in the first half of 2011.  The interest-rate spread in  foreign currency also narrowed during the review 
period, from 5.6 per cent in 2005 to 4.7 per cent in the second quarter of 2011 (Table I.4). 
Table I.4 
Main monetary indicators, 2005-2011 
(Per cent) 
 2005 2006 2007 2008 2009 2010 2011a
Money supply and credit (12-month variation)        
M1 33.4 20.0 31.8 17.5 11.9 28.1 17.2
M2 27.2 22.1 31.0 17.3 14.9 31.0 26.2
M1/GDP (per cent of GDP) 7.0 7.5 8.4 8.5 8.7 9.8 8.8
Interest ratesb       
Monetary policy rate (TPM) (end of period) n.a. n.a. 7.25 7.75 6.25 6.5 8.0
Average lending rate, Ur$ (end of period) 27.6 26.9 22.3 27.5 26.6 22.7 17.8
Average deposit rate, Ur$ (end of period) 2.1 2.3 4.4 5.4 4.9 4.8 5.1
Interest rate spread, Ur$ (end of period) 25.5 24.6 17.9 22.0 21.7 17.9 12.7
Average lending rate, US$ (end of period) 7.2 7.6 6.6 6.9 5.6 5.3 5.0
Average deposit rate, US$ (end of period) 1.6 2.1 2.3 1.0 0.5 0.4 0.3
Interest rate spread, US$ (end of period) 5.6 5.5 4.3 5.9 5.1 4.8 4.7
Inflation (annual percentage change)       
Consumer price index (CPI) 4.9 6.4 8.5 9.2 5.9 6.9 7.9 
(Oct.)
Producer price index, national products (IPPN) -2.6 5.9 11.8 16.9 2.1 5.5c 13.0 
(Nov.)
Exchange rate       
Exchange rate (period average:  Ur$/US$)d 24.5 24.1 23.5 20.9 22.6 20.1 19.2
Exchange-rate variation (December-December)d -8.5 1.2 -11.9 13.3 -19.4 2.4 -8.4
Variation in the real effective exchange rate (De cember-December) -8.9 4.5 -7.0 -7.4 -10.2 -0.4 -2.3
Variation of the real effective exchange rate to the Ar g$ (December-December) -6.1 5.2 -13.6 1.0 -25.9 0.7 -1.7
Variation of the real effective exchange rate to th e R$ (December-December) 5.9 5.4 2.7 -19.1 9.4 3.8 1.4
a First half of the year. 
b Annual effective interest rate, weighted  monthly average of fixed-term deposit operations, excluding, in the cases of BROU an d 
COFAC, those related to the deposits re programmed by Law No. 17.523 of 4 August 2002.  Average of the banking system. 
c Rate of growth between the first quart er of 2009 and the first quarter of 2010. 
d Figures obtained from the IMF, Intern ational Financial Statistics, June 2011. 
Source : Online information from the Central Bank of Uruguay.   Viewed at:  http://www. bcu.gub.uy/Estadisticas-e-
Indicadores/Paginas/Default.aspx;  Internationa l Monetary Fund (IMF), IFS database, June 2011. 
28. Despite the tight monetary policy implemented in the period 2006-2009, inflation, measured 
as the increase in the consumer price index (CPI), accelerated from 4.9 per cent a year in 2005 to 9.2 per cent in 2008, in the wake of higher intern ational food and fuel prices.  The international 
                                                      
17 BCU (2011b). Uruguay WT/TPR/S/263/Rev.1 
 Page 11 
 
 
  financial crisis and the consequent slowdown in economic growth took some of the steam out of 
inflation in 2009, but price rises started to gather pace again in 2010 and 2011, eliciting an increase in 
the TPM.  The authorities consider that the great er upward pressure on the CPI in 2010 stemmed from 
non-tradable goods prices;  but in 2011, the part attr ibutable to tradable goods prices and administered 
prices rose significantly.  The BCU views this as rev ealing the effects of the external commodity price 
shock, which was partially absorb ed by exchange-rate appreciation.18 
29. Since June 2002, Uruguay has maintained a fl oating exchange-rate regi me, which is the only 
alternative compatible with inflation-targeting.   Nonetheless, the BCU intervenes on the foreign 
exchange market to cushion volatility.  Given the Uruguayan economy's openness and high level of 
dollarization, the authorities see this interven tion as helping to stabilize inflation and mitigate 
potential effects on balances in the real sector of  the economy.  During the review period, the 
Uruguayan peso revalued in both nominal and real  effective terms (by 27 per cent between 2005 and 
mid-2011).19  The authorities view the real appreciation as fundamentally reflecting the sustained 
process of productivity growth and essentially to impr ovement in the terms of trade, which explains 
why the tradable sector has not been adversely affect ed.  On the contrary, the latter has been one of 
the most dynamic sectors and has underpinned th e growth of the Uruguayan economy over the last 
six years. 
(5) BALANCE OF PAYMENTS  
30. Although the current account of Uruguay's bala nce of payments has traditionally been in 
deficit, the size of the shortfall has been moderate  for most of the review period, between 0.4 and 
2 per cent of GDP.  The exception was 2008, when a surge in imports, outweighing an also substantial 
increase in exports, caused the deficit to widen to 5.5 per cent of GDP.20  In general terms, the modest 
current-account deficit over the last few years has reflected the improvement in the country's public 
finances.  As noted in the previous review, the mainte nance of an external deficit can be related to the 
behaviour of the private sector, which has conti nued to rebuild its expe nditure, given the rapid 
economic growth during the period. 
Table I.5 
Balance of payments, 2005-2011 
(US$ million) 
 2005 2006 2007 2008 2009a 2010a 2011a,b
I.  Current account 42.3 -391.9 -220.5 -1,729.0 -114.7 -466.5 -216.6 
A.  Trade account 392.6 -89.9 158.0 -960.8 681.0 767.4 471.2 
Exports 5,085.4 5,787.2 6,933.4 9,372.2 8,648.4 10,659.0 6,580.0 
Goods (f.o.b.) 3,774.1 4,399.8 5,099.9 7,095.5 6,407.8 8,059.1 4,642.4 
Services 1,311.3 1,387.4 1,833.5 2,276.7 2,240.6 2,599.9 1,937.6 
Imports 4,692.7 5,877.1 6,775.4 10,333.0 7,967.4 9,891.5 6,108.8 
Goods (f.o.b.) 3,753.3 4,898.5 5,645.4 8,809.7 6,676.6 8,320.2 5,175.2 
Services 939.5 978.7 1,130.0 1,523.3 1,290.9 1,571.4 933.6 
B.  Income -494.2 -428.3 -515.9 -916.6 -933.7 -1,351.9 -750.3 
Credit 563.1 741.5 885.0 757.5 531.6 463.7 255.7 
Interest 559.9 723.9 869.0 736.8 512.0 434.2 240.8 
Profits 3.2 17.6 16.1 20.7 19.6 29.4 14.9 
                                                      
18 BCU (2011b). 
19 See BCU statistics on the real exchange rate.  Viewed at:  http://www.bcu.gub.uy/autoriza/ 
peeesi/indicecambiorea l/eesi04d1005.pdf. 
20 According to the authorities, the import growth was largely due to the energy crisis caused by the 
drought in 2008, which forced the country to resort to thermal power generation and diesel imports. WT/TPR/S/263/Rev.1 Trade Policy Review 
Page 12 
  
   2005 2006 2007 2008 2009a 2010a 2011a,b
Debit 1,057.3 1,169.8 1,400.9 1,674.1 1,465.3 1,815.6 1,006.0 
Interestc 838.8 915.7 881.9 840.2 808.5 833.3 436.8 
Profits 218.5 254.2 519.0 833.8 656.8 982.3 569.2 
C.  Current transfersd 143.8 126.3 137.5 148.4 138.0 118.0 62.5 
Credit  161.1 150.0 164.6 187.7 175.9 175.0 87.8 
Debit 17.3 23.7 27.1 39.3 37.8 57.0 25.3 
II.  Capital and financial account 752.1 528.0 1,505.2 3,097.6 1,353.1 1,539.0 1,524.3 
A.  Capital transferse 3.8 6.5 3.7 0.2 0.0 0.0 0.0 
B.  Direct investment 811.1 1,494.5 1,240.1 2,116.6 1,576.3 2,401.7 1,012.4 
Abroad -36.3 1.0 -89.4 10.9 -16.4 43.9 -7.8 
In Uruguayf 847.4 1,493.5 1,329.5 2,105.7 1,592.7 2,357.8 1,020.1 
C.  Portfolio investment 805.9 1,686.4 1,150.5 -557.7 -716.1 -547.6 485.4 
D.  Other investment -868.8 -2,659.4 -889.1 1,538.5 492.9 -315.1 26.5 
Assets -1,112.7 1,414.9 -2,027.5 43.4 -1,465.1 493.7 -271.0 
Commercial credits -110.0 48.9 -36.5 -70.2 1.7 -12.2 12.9 
Loans 38.6 -6.0 -5.6 -46.7 -25.0 -7.4 -72.2 
Money and deposits -405.7 112.4 -1,811.9 525.4 -1,413.2 450.3 -163.8 
Other assets -635.6 1,259.5 -173.6 -364.9 -28.6 63.0 -47.9 
Liabilities 244.0 -4,074.3 1,138. 4 1,495.1 1,958. 1 -808.8 297.5 
Public sector -122.2 -2,904.5 479.0 474.3 1,508.2 -479.5 26.5 
Private sector 366.2 -1,169.8 659.3 1,020.8 449.9 -329.3 271.0 
III.  Errors and omissions -174.1 -151.5 -279.3 863.7 349.9 -1,433.4 695.3 
IV.  Overall balance of payments 
(variation in BCU reserve assets) -620.3 15.4 -1,005.4 -2,232.4 -1,588.3 360.8 -2,003.0 
a Preliminary figures. b Figures for the first two quarters. 
c Since 2006, interest on external loans received by th e public sector has been calculated on accruals basis. 
d Includes an estimate of family remittances. 
e Capital transfers have been revised to reflect agreements si gned between the Governments of Ur uguay, Spain and France.  Under  
these agreements, the creditor governments condone payments of  principal and interest, when the loans become due, provided 
that the Uruguayan Government spends the funds that would ot herwise have been used to service the corresponding debt, on 
domestic works relating to social improvement. 
f Includes an estimation of direct investment in land. 
Source : Online information from the Central Bank of Uruguay.   Viewed at http://www. bcu.gub.uy/Estadisticas-e-
Indicadores/Paginas/Default.aspx;  a nd online information from the National Institute of Statistics.  Viewed 
at:  http://www.ine.gub.uy/e conomia/ externo2008.asp. 
31. Uruguay has maintained a surplus on its  trade in goods and services except 
for 2008 (Table I.5).  Within this category, visibl e trade has been in deficit, partly reflecting the 
domestic industry's reliance on imported inputs, com pounded by a high level of imports of consumer 
and capital goods.  Goods exports ha ve benefited from stronger dema nd and favourable international 
commodity prices, while import growth has also reflected the expansion of aggregate demand and the real appreciation of the peso.  The balance of trad e in services traditionally records a large surplus in 
Uruguay, thanks to income generated by inbound tourism. 
32. The financial and capital account has been in surplus throughout the review period, posting a 
high in 2008.  Net foreign direct investment (FDI) grew rapidly between 2006 and 2008, before 
slackening in 2009 following the completion of a large-scale investment project.  Nonetheless, there was a strong rebound in 2010, with FDI inflows ex ceeding US$2.4 billion;  and this was accompanied 
by large short-term capital inflows reflected in the errors and omissions categor y.  Gross international 
reserves have been growing during the review peri od, reaching close to US$7.8 billion in late 2010, a 
level equivalent to more th an nine months of imports. Uruguay WT/TPR/S/263/Rev.1 
 Page 13 
 
 
  33. Uruguay's total external debt grew in nominal te rms during the review period, to reach a total 
of US$14,626 million in late 2010.  Nonetheless, the ex ternal debt/GDP ratio fell sharply, from almost 
69 per cent in 2005 to 45 per cent in 2010, reflecting the rapid growth in GDP and the peso appreciation.  Moreover, the robust growth in e xports significantly lowered the debt service/export 
ratio, from 38.6 per cent in 2005 to 13.5 per cent in 2010. 
(6) T
RADE AND INVESTMENT FLOWS  
(i) Trade trends 
34. The value of Uruguay's external trade in goods and services (exports and imports) was 
equivalent to 50.9 per cent of GDP in 2010 (58.9 per cent in 2005).  According to figures from the 
United Nations COMTRADE database (on which Tables AI.1 to AI.4 are based), the country's total 
merchandise trade grew by 110 per cent during the period 2005-2010.  Although this was mainly due 
to burgeoning external demand and higher agricultura l product prices, to some extent it also reflects 
the exchange-rate appreciation that has occurred over the last few years.  Between 2005 and 2010, 
imports grew slightly faster than exports (16.5 per cent per year on average compared to 15.6 per cent);  in 2010, merchandise imports am ounted to US$8,315 million and exports totalled 
US$7,030 million. 
(ii) Breakdown of merchandise trade 
35. Exports consist mainly of the commodities in  which Uruguay has comparative advantages, 
namely food and agricultural raw materials.  The shar e of these primary products in the country's total 
merchandise exports grew from 69.0 per cent in 2005 to 75.6 per cent in 2010 (Table AI.1).  Food 
products accounted for 62.4 per cent of exports in 20 10, with bovine meat and soya the main products 
exported.  Meat exports are sent mainly to Russia,  the United States and several European countries.  
Soya exports have grown vigorously, at an aver age annual rate of 50.0 per cent during the review 
period, reflecting the major investments made in this  crop in recent years;  wheat exports have also 
grown strongly.  Agricultural raw materials account ed for 10.9 per cent of total exports in 2010, 
including sales of wood which expanded by 40 per cent per year on average between 2005 and 2010, 
partly as a result of public incentive policies a nd investments made in the forestry industry.
21 
36. Manufactures represented a declining share of exports during the review period, accounting 
for 23.4 per cent of the total in 2010 (29.7 per cen t in 2005).  Nonetheless, performance varied across 
the different sub-segments.  Exports of electrical wire and cables, plywood, fungicides, machinery and tractors for agriculture were particularly dynamic, as  were motor vehicle exports .  In contrast, exports 
of office machinery and telecommunications equipmen t, textiles, clothing and leather products all 
declined during the review period. 
37. On the other side of the trade balance, manuf actures grew their share of total merchandise 
imports from 62.9 per cent in 2005 to 69.4 per cent in 2010 (Table AI.2).  The main import categories in 2010 were transport machinery and material (31.7 per cent of the total) and chemical 
products (18.1 per cent).  The most buoyant  categories during the review period were 
power-generating machinery, automated digital machines, electric appliances for telephony and 
telegraphy, television receivers and motor vehicles.   The commodity share of imports slipped to 
                                                      
21 Gayá, R. (2011). WT/TPR/S/263/Rev.1 Trade Policy Review 
Page 14 
  
  30.6 per cent in 2010, mainly owing to a reduction in the share of fuels (petroleum oils) in total goods 
imports.22 
(iii) Direction of trade in goods 
38. Uruguay's exports to its MERCOSUR partners grew  at an average annual rate of 22.8 per cent 
in 2005-2010, and represented nearly one third of it s total exports in 2010 (Table AI.3).  This was 
mainly due to larger shipments to Brazil, whic h tripled during the review period and accounted for 
21.1 per cent of total exports in 2010, making that  country Uruguay's largest destination market.  
Exports to Argentina and Paraguay also rose substa ntially and accounted for 7.3 per cent and 2.3 per 
cent, respectively, of Uruguay's foreign sales in 2010.  At the same time, exports to other countries of 
the region also increased (Bolivarian Republic of Ve nezuela, Peru and Chile), whereas shipments to 
North American countries declined sharply.  In pa rticular, the United States' share in Uruguay's total 
exports collapsed from 23.2 per cent in 2005 to just 3.0 per cent in 2010. 
39. Although exports to Western Europe as a whole doubled in value, their share in the total 
declined slightly;  the European Union absorbed 14.6 per cent of Uruguay's exports in 2010.  Shipments to countries of the Commonwealth of Independent States, including Russia, have also 
grown rapidly, reflecting an increase in meat sale s to the Russian market, which is currently the 
leading destination for Uruguayan exports in this product category.  In Asia, sales to the leading market, China, accounted for 5.4 per cent of Uruguay's total exports in 2010, having tripled in value during the review period, partly as a result of the ri se in international agricultural commodity prices.  
In contrast, sales to Japan declin ed sharply to account for just 0.1 per cent of the total in 2010. 
40. On the import side, the share of shipments from countries of the Americas remained broadly 
stable at around two thirds of the total during the review period (Table AI.4).  Brazil and Argentina 
continue to be Uruguay's leading suppliers, repr esenting 18.6 per cent and 17.0 per cent respectively 
of total imports in 2010, although their share dec lined by about five percentage points, whereas the 
share of imports from Paraguay grew.  Imports from the Bolivarian Republic of Venezuela have also 
increased.  Western Europe, including the European Un ion, increased its share slightly to 13.3 per 
cent in 2010.  In the case of Asia, there was a shar p increase in imports from China, whose share in 
Uruguay's total foreign purchases grew by nearly 7 percentage points between 2005 and 2010, to 
reach a level of 13.5 per cent, the value of imports  from that country having grown nearly fivefold 
during the period. 
(iv) Trade in services 
41. Uruguay recorded surpluses in its trade in services between 2005 and 2010, amounting to 
US$1,042 million in 2010 (Table I.6).  Service exports grew on a sustained basis throughout the period, to total US$2,597 million in 2010, nearly doubl e the 2005 figure.  The leading sector is travel, 
which accounted for 57.7 per cent of services exports  in 2010 and reflects the importance of earning 
generated by Uruguay's inbound tourism.  Imports of services also grew steadily, although at a slower 
pace during the review period, to reach a level of US$1,555 million in 20 10.  Outgoings in the 
transport category accounted for just over 40 per cent of total service imports, partly reflecting rising 
freight costs. 
                                                      
22 The authorities have stated that this reduction was due to a change in pricing policy, which in turn 
resulted in a change in the structure of fuel demand,  allowing for more efficient use of imported oil. Uruguay WT/TPR/S/263/Rev.1 
 Page 15 
 
 
  Table I.6 
Trade in services, 2005-2011 
(US$ million) 
 2005 2006 2007 2008 2009a2010a 2011a,b
Balance 371.8 408.7 703.4 753.4 958.6 1,041.9 1,004.0 
Exports 1,311.3 1,387.4 1,833.5 2,276.7 2,238.9 2,597.1 1,937.6 
Transport 464.8 480.9 562.3 672.7 437.5 537.7 301.0 
Travel 594.4 597.8 808.9 1,051.4 1,312.1 1,496.2 1,346.5 
Other servicesc 252.0 308.8 462.3 552.6 489.3 563.2 290.1 
Imports 939.5 978.7 1,130.0 1,523.3 1,280.3 1,555.2 933.6 
Transport 419.0 449.7 549.5 640.6 484.7 647.8 375.5 
Travel 251.7 213.2 239.3 357.5 336.1 419.0 294.5 
Other servicesc 268.7 315.7 341.2 525.2 459.5 488.5 263.6 
a Preliminary figures. 
b Figures for the first two quarters. c Includes a partial estimation of productive activity in free z ones and information from the survey coordinated with the 
Uruguayan Chamber of Information Technologies (CUTI) on activity related to information technology programmes. 
Source : Online information from the Central Bank of Uruguay.   Viewed at:  http://www. bcu.gub.uy/Estadisticas-e-
Indicadores/Paginas/Default.aspx. 
(v) Foreign investment 
42. The economy's solid performance, supporte d by macroeconomic stability and an 
investment-friendly legal framework, has contributed  to exponential growth in FDI flows into 
Uruguay in recent years.  In broader terms, this reflects increasing investment flows into emerging 
countries generally.  From 2005 to 2010, the FDI stock in Uruguay grew fivefold, to reach 
US$14,830 million in late 2010 (Table I.7).  Po rtfolio investment had also doubled to 
US$8,415 million by the end of that year. 
Table I.7 
Foreign investment position, 2005-2010 
(US$ million, year-end) 
 2005a2006a2007a2008a2009a2010a Average annual growth
2005-2010 
Direct investment in Uruguay 2,844 3,899 6,356 7,998 12,536 14,830 39.1 
Direct investment abroad 159 218 337 258 300 304 13.9 
Portfolio investment in Uruguayb 4,410 6,436 7,858 7,176 7,812 8,415 13.8 
Portfolio investment abroad c 1,858 2,329 2,322 2,374 2,723 4,064 16.9 
a Preliminary figures. 
b Holdings by non-residents are va lued at average market prices. 
c Information from the coordinated survey  of portfolio investment up to 2009. 
Source : Online information from the Central Bank of Uruguay.   Viewed at:  http://www. bcu.gub.uy/Estadisticas-e-
Indicadores/Paginas/Default.aspx. 
43. The main source countries for FDI entering Uruguay over the last few years include 
Argentina, Brazil, the United States, Bermuda, th e Netherlands, Spain, Belgium, France and other 
European countries, together with Japan (Table I.8).  The leading recipient sectors are financial 
services, telecommunications, tourism, real estate pr operty and land, agribusin ess, forestry and other 
manufactures. WT/TPR/S/263/Rev.1 Trade Policy Review 
Page 16 
  
  Table I.8 
Foreign direct investme nt by country, 2005-2009 
(US$ million) 
 2005 2006 2007 2008 2009
TOTAL 847.4 1,493.5 1,329.5 2,105.7 1,592.7
MERCOSUR 131.0 348.2 473.6 748.1 604.3
Argentina 105.6 281.9 372.6 533.9 463.8
Brazil 20.4 55.8 85.5 183.2 112.0
Paraguay 5.1 10.6 15.5 31.0 28.5
Other America 50.1 57.1 87.2 255.5 420.1
United States 35.4 66.7 42.5 143.5 167.2
Canada 0.0 0.0 3.5 2.8 0.0
Mexico 0.0 0.0 0.0 24.2 0.0
Bahamas 11.7 -12.9 12.2 34.1 44.1
Bermuda 0.0 0.0 0.0 7.2 223.5
Cayman Islands 0.0 0.0 0.0 2.2 2.3
Chile 0.0 3.6 21.3 3.4 -42.9
Ecuador 0.0 0.0 0.0 7.4 0.0
Panama 3.0 -0.3 2.3 10.5 5.8
Peru 0.0 0.0 0.0 1.2 0.0
Venezuela, Bolivarian Republic of 0.0 0.0 5.4 18.8 20.1
Europe 268.8 111.1 327.6 376.4 277.1
Germany 0.8 5.0 16.2 4.3 0.5
Belgium 0.0 1.0 46.0 -2.3 53.1
Denmark 0.0 2.4 0.0 -0.6 0.4
Spain 202.9 81.5 153.5 232.2 54.7
France 9.8 6.9 25.3 17.2 23.4
Netherlands 29.4 -18.0 10.1 14.4 110.4
Luxembourg 0.8 0.0 2.9 4.2 12.2
United Kingdom 21.7 32.9 66.3 82.1 14.1
Italy 0.0 3.0 0.0 3.9 -0.2
Sweden 0.6 0.9 2.0 0.3 2.6
Switzerland 2.8 -4.4 5.2 20.7 5.9
Other countries 397.4 977.0 441.0 725.5 291.2
Japan 0.0 0.0 0.0 3.4 39.0
New Zealand 0.0 0.0 0.0 13.8 0.0
Othera 397.4 977.0 441.0 708.3 252.1
a Includes firms pertaining exclusively to one country fo r the purposes of respecting statistical confidentiality. 
Source : Online information from the Central Bank of Uruguay.   Viewed at:  http://www. bcu.gub.uy/Estadisticas-e-
Indicadores/Paginas/Default.aspx.