Uruguay-ECONOMY

Gross Domestic Product (GDP): Approximately US$9.2 billion in 1990, or US$2,970 per capita, making it one of highest-income countries in Latin America. As result of severe recession, real GDP declined by almost 17 percent during 1981-84 but increased after 1985. Led by growth in agriculture and fishing sectors, GDP grew by 6.6 percent in 1986 and 4.9 percent in 1987 but slowed to 0.5 percent in 1988, 1.5 percent in 1989, and 0.9 percent in 1990.

Agriculture: Self-sufficient in most basic foodstuffs. About 90 percent of country, including 8 percent arable land, can be used for some kind of agriculture, mainly for extensive livestock grazing, wheat, rice, corn, and sorghum. In 1988 agricultural activity, including fishing, directly generated 13 percent of GDP and provided over half of value of exports. Although sector's growth rate in 1989 was low (1 percent), its output increased an estimated 3.5 percent in 1990.

Industry: Accounted for 33 percent of GDP in 1988. Industrial sector geared mostly to small domestic market. Industries included meat processing, wool and hides, sugar, textiles, footwear, leather apparel, tires, cement, fishing, petroleum refining, and wine making. Industrial production growth rate in 1988 about -2.9 percent.

Mining and Energy: Exports granite and marble. Semiprecious stones also have been found in quantity. Primary sources of energy hydroelectricity and imported petroleum (mostly crude oil).

Services: Accounted for 42 percent of GDP in 1988, including 6 percent for transportation, storage, and communications and 15 percent for banking and commerce.

Currency and Exchange Rate: Uruguayan new peso. In 1990 average exchange rate was US$1=N$Ur1,171. On December 31, 1990, buying and selling interbank rates were N$Ur1,573 and N$Ur1,594, respectively, per US$1. On March 2, 1992, average exchange rate was US$1=N$Ur2,674.

Trade: Exports wool, meat, hides, manufactured goods, and rice (total about US$1.6 billion in 1989). Imports fuels and lubricants, metals, machinery, transportation equipment, and industrial chemicals (total about US$1.1 billion in 1989). Main export markets and sources of imports Brazil, Argentina, United States, and European Community.

Balance of Payments: Trade balance positive and steadily improving during most of 1980s. Current account balance negative until mid-1980s, owing to burden of debt service (reduced from US$613 million in 1988 to US$449 million in 1989). Foreign debt to United States in 1989 about US$6.2 billion of total US$6.7 billion foreign debt (one of developing world's highest per capita). Capital account balance positive for most of 1980s.

Fiscal Year: Calendar year.

Fiscal Policy: Stabilization plan of Julio María Sanguinetti (president, 1985-90)--designed to reduce deficit and inflation and improve balance of payments--had mixed results. Public-sector deficit declined, but inflation continued unabated, reaching at least 85 percent by 1989, owing to monetary and exchange rate policies. Luis Alberto Lacalle de Herrera (president, 1990-) attempted to further cut fiscal deficit and tighten monetary policy by introducing new taxes on wages and increasing value-added tax ( VAT--see Glossary) rate, gasoline prices, and public-sector tariffs. Nevertheless, inflation rose to 129 percent in 1990 but then dropped to 106 percent in 1991.

Data as of December 1990