Uruguay - Economic memorandum

Report No. 1336a-UR Economic Memorandum on Uruguay -\. ',ta [-> F~ rl fl UIa n December 10, 1976 Latin America and the Caribbean Regional Office FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may dot otherwise be disclosed withiout World Bank authorization.  CURRENCY EQUIVALENTS Exchange Rates Effective September 30, 1976 Commercial Rate Buying US$1.00 - NUr$3.61 Selling US$1.00 - NUr$3.65 Financial Rate Buying US$1.00 - NUr$3.86 Selling US$1.00 - NUr$3.87  FOR OFFICIAL USE ONLY This report is based on the findings of an economic mission that visited Uruguay during June 1976, com- posed of: Alfredo Gutierrez (Chief of Mission) Peter Griffith (Fiscal Economist, IMF) R. Vaughan Sear (Power Consultant) Jose Sidaoui (Research Assistant) Albert Stocker (Young Professional) Manuel Trucco (External Debt Analyst) Lee Ward (Fiscal Consultant, OAS) Tlhi documnt h mtricted distributon and may be usd by ecIpients only in the performance of their official duties. Its contents may not otherwise be disclosod without World Dank authorization.   TABLE OF CONTENTS Page No. MAP SUMMARY AND CONCLUSIONS ............. .. ................ i - vii I. RECENT ECONOMIC PERFORMANCE ..... .................1 A. Background ....... ...........................1 B. Growth of Income and Output, 1974-76 ........ 2 C. Money and Credit ............................ 5 D. Public Finances ............................. 7 Central Government ........................ 7 Rest of the Public Sector .... ............. 14 E. Prices and Wages ............................ 15 F. Balance of Payments ......................... 17 Current Account ........................... 17 Capital Account ........................... 20 G. External Debt ............................... 21 II. SECTORAL ISSUES .................................. 23 A. Agriculture ................................. 23 B. Industry .................................... 25 C. Power ....................................... 29 D. Urbanization, Unemployment and Income Distribution ........................ 31 III. GROWTH PROSPECTS ................ ................. 35 A. Development Strategy ........................ 35 B. Policy Requirements ......................... 37 Trade Policy .............................. 37 Fiscal Policy ............................. 37 Public Sector Management .... .............. 38 C. Growth Prospects, 1976-80 ..... .............. 39 Growth and Investment ..... ................ 39 Fiscal Performance ...... .................. 43 Export Prospects ...... .................... 45 Imports .......... ......................... 46 External Capital Requirements .... ......... 48 ANNEXES 1. An Analysis of Uruguay's Tax System 2. Uruguay's Public Sector Fiscal Performance, 1971-75 STATISTICAL APPENDIX   6-& b - - 4 - 4 @,- : ij ,~~~~~~~~~~~~~-~ ANL T \ T 32 {c~~~~~~~~~~~~~~~~~~~~~~~~m @ >;i t1 ,w S t 1- ~~~ 5 A L T 0 & < r tt I ~~~ R I V\R A - e8 _ i <5:: ; , ~~~p A Y S AN D U P,85' 3 a -3 QR \ S JY' XJ T A C U A R E 1\1 B -JX 5 \ xs S v~~~~~~~~~~~~~~~~~~~~~~~~~'pJytno,l,fl t1c~t b R 1 R. 8- ~ ~ ~ ~ ~ ~ ~ - L; ______________ LA 52 N AU,Jc S i- , > t > ^rco tlo z i TVIDE yv m oeETe vw ' t i | / s u _ _51