Economic overview
Uruguay is one of Latin America’s most stable and successful economies, benefiting from its own economic and democratic policies and from the global success of its neighbor, Brazil. The country’s main industries are agriculture and food processing, although other manufacturing plays a role. Uruguay achieved average annual growth of 5.5% from 2006 to 2013, which fueled infrastructure improvements and social reforms that have benefited many of the poorest citizens in this nation of 3.5 million people. The improvements helped Uruguay withstand the shock of the international crisis of 2008-2009, according to the World Bank. Uruguay’s economic growth rate was 4.4% in 2013; the economy is expected to expand by 3% this year. The country recorded 6.3% unemployment in 2013, which was historically low.
The country’s outgoing president, José Mujica, has championed poverty reduction and ushered through legalization of abortion, gay marriage and marijuana—often amid opposition. The presidential candidate from Mujica’s Broad Front party, Tabaré Vázquez, won 48% of the vote in the first round of voting in October. A final round of voting is scheduled Nov. 30.
Uruguay played host to the inaugural World Cup in 1930. Country leaders have said they would like to co-host the 2030 World Cup with Argentina and, perhaps, Chile.
Business travel industry insight
The government shut down Uruguay’s bankrupt flagship carrier Pluna in 2012 after investors pulled funding. But several regional and international carriers still serve the country. Most international flights arrive at Carrasco International Airport, about 25 kilometers (15.5 miles) from the center of capital city Montevideo. Major cities have public transportation, and metered taxis are plentiful. A system of buses links the country. Mobile phone service is reliable; three carriers offer nationwide service. The national currency is the peso, and there’s no commission charged on currency exchanges. It’s easier to exchange U.S. dollars than other foreign currencies. Most hotels, restaurants and shops accept credit cards, and many ATMs accept North American or European credit cards.
Opportunities
- The country has made progress in diversifying export destinations. In 2000, Uruguay placed 80% of its sales in 14 markets; in 2012 the same percentage went to 19 markets.
- According to the World Bank’ Opportunity Index, Uruguay has a high level of equality in access to basic services such as education, potable water, electricity and sanitation. Literacy is high.
- Uruguay reduced poverty from 39.9% in 2004 to 11.5% in 2013, and cut extreme poverty from 4.7% in 2004 to 0.5% in 2013, as reported by the World Bank. Wealth is more evenly distributed in the country than at any point in the last 30 years, according the government.
Challenges
- Uruguay has made significant progress in debt reduction, yet debt remains at relatively high levels compared to other nations.
- The country has worked to diversify its trading partners over the last decade, but regional partners, especially Brazil, account for about 20% of exports.
- Inflation is on the rise. The government is trying to fight it using economic and fiscal policy tools.
When your business expands into new markets, BCD Travel can get your travelers where they need to be. Talk to your account manager about how we can support your company’s growth across the globe.
