Multi-dimensional Review of Uruguay
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Multi-dimensional Review of Uruguay

Volume 1: Initial Assessment

Uruguay has made remarkable progress over the past decade. Stable macroeconomic policies and a favourable external environment have permitted brisk growth and the financing of social policies. Substantial improvements in several dimensions of human well-being have occurred during this period, alongside considerable reductions in external risks. The conditions ahead, however, may present challenges to maintaining performance. Overcoming these challenges will require finding the appropriate balance between long run objectives and macroeconomic and fiscal stability.

One of the main obstacles to economic growth is the insufficient and inadequate provision of human capital and skills. A number of challenges remain for education, which, together with fiscal policy, are key means of reducing inequalities and sustaining economic growth. In addition, Uruguay needs to address labour shortages to avoid constraints on future growth, especially as exports become more skills-intensive. It is important to orient social policies and expenditures towards the most vulnerable groups.

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Structural trends and economic performance in Uruguay You do not have access to this content

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Author(s):
OECD

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The period of expansion that started after the economic and financial crisis of 2001-02 was the first significant acceleration in GDP growth since the early 1970s, and the strongest expansion in GDP per capita since the last century. This chapter reviews long-term trends in economic growth from an aggregate and sectorial perspective. It explores the proximate causes behind income and labour productivity gaps, as well as some of the framework conditions and policies that might constitute a challenge to sustaining growth momentum. It places special emphasis on changes in the economic structure, in particular exports, given the small size of the Uruguayan economy and the importance of trade for economic performance. Lack of human capital and skills appear to restrict growth prospects, and policies are focusing on expanding infrastructure investment to overcome constraints in this area. Important changes within and across economic activities are taking place, including technological progress in several primary activities and the expansion of some high value-added services. These changes have been stimulated by external demand and investments, encouraged by recent generous government incentives. However, they also place greater pressure on human resources and require a rethinking of existing support policies to maximise their development impact.

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