Economic trends
Uruguay's GDP reached 32.2 billion USD in 2008. At the beginning of the year 2000, Uruguay went through the worst economic and financial crisis in its history due to many factors, such as:
- the devaluation of the Brazilian real in 1999;
- the Argentinean failure of paying back its foreign debt;
- the deep economic and institutional crisis that followed and;
- the outbreak of an epidemic of the foot-and-mouth disease which led to the closing-down of all meat export markets in the country.
Uruguay's economy began to recover after 2004, but it is currently showing a declining growth rate due to the international financial crisis. The country depends strongly of its foreign trade, especially for its agricultural and hydro-electrical exports. However, Uruguay enjoys a very positive climate for investment with a strong legal system and open financial markets.
Even though exports are increasing and tourism is developing, the economy still remains fragile. In fact, the public debt is increasing, the unemployment rate is almost 20% of the active population and 30% of the population live below the poverty line.
Main branches of industry
Agriculture contributes 10% to GDP and it is the largest export sector. Uruguay has rich agricultural land. Almost 90% of the land is devoted to livestock breeding (cattle, sheep, horses and pigs). Rice is the main crop, followed by wheat, corn and sugar cane. There is also market gardening and fruit farming as well as wine-growing all along the coast of the Rio de la Plata.
Agriculture and animal food processing account for half of the industrial activity, which represents about 30% of the GDP. Fray Bentos and Paysandu are companies well-known for their frozen meat factories and canned foods. Other manufacturing activities include beverages (especially wines), textiles, construction materials, chemicals, oil and coal.
Services contribute almost 60% to GDP, due mainly to financial services and tourism.
International trade
Uruguay is a member of Mercosur (common market between Uruguay, Paraguay, Argentina, and Brazil). The share of foreign trade in the country’s GDP is around 50%. In 2008, its exports represented about 7 billion USD. Uruguay main export partners are: Brazil, China and Argentina, as well as the European Union. The commodities exported are mainly meats, dairy products, leather and raw skins, cereals and wool. Its imports represent about 8.8 billion USD. Its main import partners are Argentina, Brazil, China and the United States. The country imports mineral fuels and oil, machinery, electric & electronic equipment, vehicles and plastics.
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