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URUGUAY FACT SHEET 2010
URUGUAY FACT SHEET
URUGUAY FACT SHEET 2010
Demography
Area
Population
GDP per capita
GDP – Composition by sector
Language
Capital
176,215 sq. km
3,494,382 people
USD 12,600
Agriculture 9,3% Industry 22,7%
(Denmark 43,000)
(Denmark 5,500,000)
(Denmark USD 63,000)
Service 68%
Spanish
Montevideo (1,400,000 people)
Figure 1: Source - CIA The world Factbook
Montevideo is the capital of Uruguay with a population of 1,4 million inhabitants. It has the most important
port in the country, and more than 80 percent of Uruguay’s export and import goes through Montevideo.
Like Denmark, Uruguay is a flat country, with the highest point, Cerro Catedral, being 514 meters.
The climate in Uruguay is temperate, it has warm to hot summers and cool to cold winters. The predominantly
gently undulating landscape is somewhat vulnerable to rapid changes from weather fronts. It receives the
periodic influence of the polar air in winter, and tropical air from Brazil in summer. Without mountains to act as
a barrier, the air masses freely move by the territory, causing abrupt weather changes.
Economic Outlook
Economic Forecast Summery Uruguay
In percent if nothing else is stated
10
8
6
4
2
0
2008
2009
GDP
2010
Unemployment rate
2011
Inflation
Figure 2: Source - Economist Intelligence Unit
Uruguay's economy relies heavily on trade, particularly in agricultural exports, leaving the country vulnerable
to fluctuations in commodity prices. In 2009 the economy suffered from lower demand in Argentina and Brazil,
which combined account for nearly half of Uruguay's exports. Despite the severity of the trade shocks,
Uruguay's financial indicators remained more stable than those of its neighbors, a reflection of its solid
reputation among investors and its investment-grade sovereign bond rating one of only two in South America.
In recent years Uruguay has shifted some of its energy into developing the commercial use of technologies and
has become the first exporter of software in Latin America.
URUGUAY FACT SHEET 2010
The sustainability of the global economy’s growth drivers remains in question, especially in industrialised
countries where the impact of fiscal stimulus programmes appears to be waning. Crucially for Uruguay, Brazil’s
latest data releases also point towards more moderate growth in the remaining quarters of 2010, although
Brazil is still expected to post GDP growth of 7.8 percent in the full year.
Uruguay’s terms of trade will be weaker in 2010-11 than in 2009, given that oil prices will on average be higher
than in 2009, but they will remain stronger than in 2000-08.
After a rebound in private consumption and increased income levels led first quarter GDP to grow by 8.9% year
on year, firm private consumption and investment are expected to drive GDP growth of 5.6 percent in 2010,
before decelerating in 2011 to 4.2 percent owing to an easing of global growth, including growth in Uruguay’s
main trade partners in the Mercado Común del Sur, Brazil and Argentina.
With risks to the growth forecast for 2010 weighted on the upside, acceleration of economic activity is forecast
to be led by domestic demand, including inventory restocking and continued firm private consumption growth
(forecast to average 4.1 percent in 2010-11), based on a recovery in employment, solid real wage growth of 3.3
percent, a return of consumer confidence and improved access to consumer credit.
Government consumption will slow to 2 percent, from a recent high of 5.2 percent in 2009, as the government
reins in spending under new austerity measures. After last year’s destocking process, inventory rebuilding is
expected to make a positive contribution to growth. After contracting in 2009, fixed investment is forecast to
rebound by 9.5 percent in 2010, before slowing to 7.2 percent in 2011, driven by large-scale foreign investment
projects in the pipeline for 2010-11.
Real exports will continue to grow on the back of rising output from the country’s large cellulose mills and a
recovery in agricultural exports. In line with firm domestic demand, import growth will recover from the sharp
contraction registered in 2009, leading the external sector to register a negative contribution to growth.
On the supply side, growth in utilities will make a significant contribution to GDP in 2010-11, as the end of a
protracted drought will allow hydroelectric plants to start generating electricity after more than a year of
(more expensive) thermal-based generation and electricity imports. Agriculture will also benefit from the
normalisation of climate conditions that affected it in 2009, with growth in crop output and in meat and dairy
production further strengthened by increases in plantation sizes and stable soft commodity prices. Since the
beginning of 2010 tourism, Uruguay’s second-largest source of foreign earnings, has continued to register
growth in arrivals and appears set to remain firm in 2010-11, as the first quarter of 2010 registered 3.8 percent
growth year on year. After stagnating in 2009 owing to the global recession, manufacturing has been gathering
steam in 2010.
Inflation
Consumer price inflation will remain slightly above the Central Bank’s target range of 4-6 percent throughout
the forecast period, with inflationary pressures stemming from rising domestic demand and continued firm real
wage growth, as unions press hard in upcoming wage negotiations. In the first quarter of 2010 inflation was
driven by tradable, and volatile food prices nudged the overall consumer price inflation (CPI) index upwards in
the second quarter. After five months of increasing inflation expectations, the BCU’s survey registered a slight
URUGUAY FACT SHEET 2010
retreat in median 12-month inflation expectations, from a high of 6.5 percent in May to 6.4 percent in June.
We currently forecast inflation averaging 6.3 percent in 2010 and 6.4 percent in 2011.
The political scene
José Alberto Mujica Cordano, known as El Pepe, (born May 20, 1935) is a Uruguayan politician,
and former guerrilla fighter, a member of the Broad Front (left-wing coalition) and current
President of Uruguay.
Mujica was Minister of Livestock, Agriculture, and Fisheries from 2005 to 2008 and a
Senator afterwards. He won the 2009 presidential election and took office as
President on 1 March 2010. He is elected for at five year period.
Minister for Economy and Finance of Uruguay Mr. Fernando Lorenzo (born …) holds a
Mechanical Engineering degree, Master of Science degree in Mechanical Engineering
(manufacturing processes) from Mechanical Engineering University of Michigan, 1978, and
a Ph.D. in Materials Science and Engineering (metallurgy) from the Materials Science and
Engineering University of Pennsylvania, 1983
He used to specialize in failure analysis of metals, plastics, corrosion mechanisms from
various sources. Prior to becoming minister of Economy, Dr. Lorenzo worked in ESI
(Engeneering Systems Inc, Dallas, Tx) and was the Director of Metallurgical Services for
CH&A Corporation in Kingwood, Texas. He has over 20 years experience in his work area
specialties.
Danish trade with Uruguay
Export
Import
2007
77.375.243
39.971.633
2008
129.687.334
60.242.625
2009
173.534.733
53.506.159
Figure 3 - Source – Denmark’s Statistic
The greatest export group from Denmark to Uruguay is commodities & semi-finished products, whereas
Denmark mainly imports foods, beverages and tobacco from Uruguay.