Uruguay displays many of the traits that the seasoned expat will have come to expect from developed nations, including a strong services sector and fiscally healthy economy. However, while in many places around the globe agriculture only adds a rather negligible contribution to the gross domestic product, it is of quite vital importance to the Uruguayan economy.
Uruguay has long made exports one of the main focus points of its economy: 2014 saw a new record with a total of 9.2 billion USD. Even though exports have decreased in 2015, the sector is still a large contributor to the economy. Most of the top exports are in the primary sector, and both unprocessed and processed agricultural goods are important pillars of the national economy.
Soybeans and cattle are two of the agricultural staples Uruguay is most well-known for, and which rake in the biggest share of export profits. Apart from those, the primary sector also produces rice, wheat, wool, milk and dairy products, and lumber. The latter is particularly important as one of the country’s most popular export goods is wood pulp (cellulose). It is estimated that more than 80% of Uruguay’s land area is used for cattle and sheep farming and related industries.
The industrial sector is largely active in food and beverage processing. Other important industries include chemicals, textiles, and machinery. Automotive and, increasingly, aeronautical industries have been on the rise in the past years. Recently, the country has also shown interest in exploring offshore drilling, with some of the world’s largest oil companies bidding for drilling rights.
Services in Uruguay are characterized by a well-educated workforce and a strong public sector, with the government monopolizing a number of important utilities such as water and landline telecommunications. The country’s wonderful beaches, such as Punta del Este, are also great economic assets with tourists, especially from the big neighbor Argentina, contributing to the national income. Furthermore, banking and consulting, IT, life sciences as well as logistics employ many of the people working in Uruguay.
Since the nation's most recent economic crisis at the turn of the century and the reforms and structural improvements that followed, people working in Uruguay have been able to reap the benefits of vigorous economic expansion.
The country has been able to maintain positive economic growth throughout the global recession, and managed to remain relatively unscathed by the problems of its neighboring countries Brazil and Argentina. On average, the Uruguayan economy grew by 5.2% annually between 2006 and 2014, and was even able to grow in the year the crisis hit hardest, 2009.
Even though unemployment increased over the last years after hitting a historical low in 2012 (around 6%), Uruguay’s unemployment rates are still a far cry from the ones that plague many other nations in the region. And the growth of Uruguay’s economy led to a significant reduction of poverty, and extreme poverty even has practically disappeared.
With its strategically beneficial location in the Southern Cone, close proximity to a number of huge markets, reliable infrastructure and macroeconomic stability, highly educated workforce, and attractive tax incentives, Uruguay has become one of the more popular options for foreign direct investments.
The country offers not only a free seaport and airport, but also a large number of free trade zones in which multinational companies working in Uruguay can set up shop and operate without having to worry about income or import taxes, as long as they meet a number of criteria. It therefore doesn’t come as a surprise that many of the world’s leading multinationals have established operations in the country.
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