According to cheeroutdoor, Uruguay has a diversified and open economy that is heavily reliant on the service sector, accounting for around 70% of GDP. The country is also a major producer of agricultural products such as wheat, corn, soybeans, and livestock. Over the past decade, Uruguay has experienced moderate economic growth driven by increased investments in infrastructure and access to foreign markets. Despite this progress, the country still faces significant challenges in terms of income inequality and poverty reduction. To address these issues, the government is focusing on developing small businesses and creating jobs for young people. Additionally, Uruguay has implemented several reforms to attract foreign investment and create a more favorable business environment.
Uruguay’s economy has traditionally been based on agriculture with meat and wool as the main products. The most important export items are beef and sheep meat, rice, maize, soy and cellulose. The primary industry’s share of GDP in 2017 was only five percent (figures from the World Bank). In recent years, the authorities have invested a great deal in developing the light industry and the service industry, the latter also with a view to regional service activities. The service sector contributed 64 percent of GDP in 2014, while the industry’s contribution was 24 per cent in 2018 (figures from the World Bank).
In 2018 Uruguay had a GDP of just over $ 17,000 per capita (the corresponding figure for Norway was 81,000). According to official figures, unemployment in Uruguay is 9.2 percent (INE, November 2019).
Of the service industries, tourism in particular has increased in importance. According to the Ministry of Tourism, Uruguay was visited by 3.7 million in 2018, of which about 2.5 million were tourists, while the rest came in a work context or to visit family. Most tourists come from Argentina and Brazil. Along the entire coast, from Colonia in the west to Chui in the east, are many popular small tourist and seaside resorts.
Uruguay experienced severe economic downturns in the early 1980s, partly due to low world demand for the country’s export goods and high foreign debt. After extensive restructuring, much of the negative development was reversed. In the early 2000s, the country was once again hit by an economic crisis as a result of a crash in Argentina, Uruguay’s main trading partner, and both the export and tourism industries were hit hard. However, from 2003 inflation and foreign debt were under control. Uruguay is among the more prosperous in South America. Together with Brazil, Argentina and Paraguay, Uruguay was founding the Mercosur Free Trade Association in 1995. Venezuela has also been a member, but was expelled in 2017 for lack of democracy. Bolivia is on its way to becoming a full member (2020).
Agriculture and fishing
About 4.5 percent of the employed are employed in agriculture, which in 2017 contributed 5 percent of the gross domestic product (GDP) (figures from the World Bank). About 90 percent of the area is used for agricultural purposes, this is used approximately 3/4 to pasture and animal husbandry and livestock have long dominated the agricultural sector with significant production and export of meat and wool, hides and skins. Dairy products are also exported. In 2016, 13.8 percent of the land area was cultivated land (figures from the World Bank). In 2005, there were 11.7 million cattle, 9.5 million sheep and 380,000 horses. Arable farming dominates the production of cereals, rice, sugar beet, potatoes, corn, fruits and vegetables. On the coastal plain in the southwest and the river plain along the Río Uruguay, wheat and other cereals are grown, rice is grown especially in the east. Fruit and vegetable cultivation as well as wine production takes place especially along the central coastal country and the areas within. Uruguay is self-sufficient with most basic foods.
10.7 percent of the area is covered by forests (World Bank, 2017): eucalyptus, pine and hardwood species such as quebracho and urunday grow in the river valleys. 4–6 million cubic meters of timber are harvested annually; The main part (about 75 percent) goes to fuel, and also to lumber and wood pulp.
Fishing was identified as an important industry for foreign exchange earnings, but the catches have been subject to large fluctuations. In 2004, approximately 117,000 tonnes were taken.
Abbreviated as URU by abbreviationfinder.org, Uruguay has limited mineral resources. There are small amounts of iron ore, lead, copper and limestone. Gold discoveries have also been made, but these have not yet been exploited. Some granite, marble, plaster, clay and semi-precious stones are extracted. Petroleum exploration in the southwest has so far produced negative results.
In 2018, 97 percent of produced electrical energy came from renewable energy sources. Of the country’s total energy consumption in 2019, 60 percent was from renewable energy sources (figures from the UN). The country has undergone a major restructuring of the energy supply as the share of renewable energy as of 2012 was only 40 percent. The most important energy sources are hydropower and wind power, which account for around 60 and 30 percent respectively. Other sources of energy are solar energy and bioenergy. Expansion of renewable energy sources in recent years has contributed to Uruguay being less dependent on imported petroleum than before. Gas is imported from Argentina through pipelines.
In 2018, the industry (including mining and power supply) contributed almost 24 percent of GDP and employed approx. 1/5 of the working population (World Bank figures). Up until the 1970s, the country’s industry was mainly aimed at the domestic market, which was small, thus hindering major industrial development. During the 1970s and 1980s, the tariff barriers were partially dismantled, and the country’s industry was increasingly aimed at the world market.
The industry is largely agricultural-based, with extensive meat packing, food and beverage production, tobacco products, textiles and clothing, footwear, skin and leather preparation and more. In addition, petroleum products, chemicals, cellulose, cement and transport equipment and equipment are manufactured. The industry is mainly located to the metropolitan area in the south.
Agricultural products and foodstuffs have long been a dominant part of the country’s exports. Of the US $ 3400 million export value (2005), 44 percent consisted of agricultural products, of which animal products such as meat, wool, hides and skins make up the bulk; vegetable products, beverages and tobacco a minor part. A lot of textiles and textiles are also exported; moreover, some plastic and rubber products, ceramics and glassware. Petroleum, machinery and vehicles, chemical products as well as metals and metal products are important import goods.
- COUNTRYAAH: Find major trading partners of Uruguay, including major exports and major imports with latest trade value and market share as well as growth rate.
The main trading partners are Brazil, Argentina, the USA and Germany.
Transport and Communications
Uruguay has a well-developed road network, among the best in South America. The main road network is 8730 kilometers, and is fan-shaped from Montevideo and connects the capital with the larger cities inland (INE, 2018). There are approx. 3000 km of railways, with connecting lines to all parts of the country, as well as to the rail network in Brazil and Argentina. Uruguay has a total fleet of 75,000 gross tonnes. River traffic goes on Río Uruguay and the bee Río Negro (to Mercedes); In total there are about 1250 km of navigable waterways. The country’s most important port is Montevideo with a large export of agricultural and industrial goods. The main international airport is Carrasco, about 20 km east of Montevideo.
Note: the capital city of Uruguay is Montevideo with a population of 1.4 million (estimate 2018). Other major cities include Salto with a population of 104,000, Paysandú with a population of 76,000, Las Piedras with a population of 71,000 (2011 census).