Economic trends
After having experienced a deep recession in 1999-2002, Uruguay revived with a growth higher than 6% in the years 2004-2008; after that, the country was affected by the global economic crisis and a strong drought. Contrary to many other countries, Uruguay has kept a positive growth in 2009 (2.9%), supported by the increase of public expenditures and investments. Thanks to the rebound of exports and the dynamism of domestic demand, the revival was quick and vigorous in 2010, the growth increased to 8.5% of the GDP. A more or less moderate growth is expected for 2011-2012.
In the context of the strong revival, the priority is given to keep the economy stable. Monetary measures to prevent an increase in inflation have been taken. The budget 2010-2014 has placed emphasis on the reduction of the public debt, the increase of expenditures in infrastructures and education, the creation of funds that will permit to face the fluctuations in the cost of electricity production due to bad weather. In the meantime, in order to encourage growth, the government is seeking to develop investment projects in the energy and transport sectors promoting public/private partnerships.
Uruguay has on one of the highest GDP per capita in South America, the unemployment rate is decreasing, being at 7% of the active population. One fourth of the population still lives beyond the poverty line.
Main branches of industry
Agriculture contributes10% to the GDP and it is the largest export sector. Uruguay has rich agricultural land. Almost 90% of the land is devoted to livestock breeding (cattle, sheep, horses and pigs). Rice is the main crop, followed by wheat, corn and sugar cane. There is also a gardening market and fruit farming as well as a wine-growing industry all along the coast of the Rio de la Plata.
Agriculture and animal food processing account for half of the industrial activity, which represents about one fourth of the GDP. Fray Bentos and Paysandu are companies well-known for their frozen meat factories and canned foods. Other manufacturing activities include beverages (especially wines), textiles, construction materials, chemicals, oil and coal.
Services employ more than two thirds of the population and contribute almost 60% to the GDP, mainly due to financial services and tourism.
International trade
Uruguay has an open economy and foreign trade represents about 55% of the GDP. Uruguay is a member of Mercosur (common market between Uruguay, Paraguay, Argentina, and Brazil). Uruguay's main clients are: Brazil, China and the European Union. The commodities exported are mainly meats, dairy products, leather and raw skins, cereals and wool. The country's main suppliers are Argentina, Brazil, China and the United States. The country mainly imports mineral fuels and oil, machinery, electric & electronic equipment, vehicles and plastics. Structurally in deficit, Uruguay's trade balance has seen an improvement due to the growth in exports.
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