The economy of Uruguay is mainly dependent on its crop yields that it exports to countries like the US and others. That said, it is a growing economy with a lot to look forward to.
The economy in Uruguay has faced some ups and downs throughout its past, however, it managed to overcome the bad times and rise back to its feet.
While it held a steady 5% annual GDP through 1996 to 1998, the recession it faced during 1999-2002 was difficult. The recession was mainly due to a country-wide withdrawal of dollars, not in Uruguay itself but the major countries it exported to. Against the US dollar, Uruguay’s exchange rate plunged, along with its GDP.
The economy fell into the dark abyss of unemployment, inflation, and external debt.
But before long, the country rose from the ruins and started rebuilding itself to meet its former glory, reaching GDPs as high as 8% after reorganizing its export quotas and adjusting its budget policies.
The economy almost tanked again in 2008 when the country nearly faced a recession, along with the rest of the world. But thanks to drastic actions taken by its government, Uruguay continued to prosper.
The local side of Uruguay’s economy has a different face to offer. Regardless of the overall statistics, some parts of Uruguay face problems like lack of sanitation and health care. The country is in need of a recycling project to decrease its pollution and avoid a potential energy crisis.
It can sometimes be difficult for the lower or middle class to obtain bank loans to start their own business.
While Uruguay is a peaceful country, there is some corruption in the bureaucracy that makes it difficult to obtain financing or licensing without resorting to bribery. This can be a common theme when doing business in most Latin American countries, although it is possible to conduct business without paying them.
This leads to a decrease in potential disposable income among these classes.
Uruguay’ population is 3.6 million people. Their GDP is US$73 billion.
Farming livestock provides 20% of Uruguay’s total exports, specifically, beef. The country produces top quality wool, which is then exported to the U.S., as well as the U.K.
Uruguay’s most prized export crop is rice. The country produces such an exquisite variety and quality of rice that it is known as the greatest exporter to Latin America. Uruguay exports its rice to Brazil, Iran, Peru, South Africa, Chile, Senegal, Argentina, Paraguay, Bolivia, Ecuador, Canada and China.
The country is making strides to increase tourism as well.
Information technology is a surprisingly robust industry in Uruguay and tech companies are starting to sprout up to compete with other global players.
Uruguay sets a strong example to countries still under strong economic difficulties.
And while the economy is thriving now, Uruguay is ever vigilant to ward off bad times like those it’s had in its past.
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