# **4.3 A Flow-of-Funds for Uruguay**

Table 4 shows the FOF constructed for Uruguay for the period 1991. The sectors included in the current and capital account matrices are the Central Government, the Private Sector, the Balance of Payments, the Production Accounts, and the Monetary Sector, which includes the Central Bank, the BROU, and Other Financial Institutions. The latter represents the rest of the banking system in Uruguay. For each of the sectors, the row and columns represent the income and expenditure breakdowns respectively. The balancing item for each sector's account is saving, shown in the last row of the current account matrix. In the capital account, the investment and other uses of financing is equal to the sources of domestic and foreign financing, including own savings.

The construction is basically standard, except for the more detailed monetary system. For this reason, we will only describe the construction of the Central Government, Central Bank, and BROU accounts. The algebraic representation of the budget constraints for all sectors is shown in Appendix C, together with a description of the variables used. The sources of information for of the macro-economic data were the Boletin Estadistico, an official publication of the Central Bank of Uruguay, and the World Tables, published by the World Bank. Infornation of external debt was taken from the World Debt Tables, also published by the World Bank. The data for the BROU was taken from the published balance sheet report for 1991.

# **The Central Government**

Under this heading we include only the fiscal authorities. Ideally, we would include the complete non-financial public sector. That is, all public sector except for the Central Bank and publicly-owned financial institutions. However, for convenience we are not going to use this concept in this paper. The rest of the non-financial public sector will automatically be included in the Private Sector, which is calculated as the residual.

In Table 4 we see that for 1991 the government collected 466.6 billion pesos in direct taxes (TD), 2,789 billion in indirect taxes (TI), and 377 billion in non-tax revenue _(A7TR)._ Additionally, it received 81 billion in the form of foreign transfers or grants _(COG)._ Total fiscal revenues then amounted to 3,714 billion pesos. Of this, the government paid 315 billion to the Private Sector in the form of transfers and subsidies _(Tgp),_ and 263 billion as interest payments on non-bank financing _(iB*Bgp)._ The government paid only 3.6 billion to the banking sector as interest payments _(iC*CGab),_ and 78.5 billion of interest payments on foreign debt _(iF*Fg)._ For consistency, the estimate for government consumption, 2633.7 billion, was taken from the government accounts, and not from the national accounts, which is slightly lower.

The data for interest payments was only available as an aggregate, without the breakdown needed for our FOF system. The government interest payments reached 345.1 billion pesos in 1991. An estimate for interest paid on foreign debt was obtained from the debt stock of government foreign debt, and the implicit interest rate obtained by dividing total interest payments in 1991, from the World Debt Tables, by the total debt stock at end-of-period 1990. Interest payments on the government domestic (bank) debt was assumed at a highly subsidized interest rate, resulting in payments of 3.6 billion to BROU. The rest is considered as interest payments for non-bank debt.

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