Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
While there are some challenges in Uruguay’s business climate, Uruguay is one of the more business-friendly countries in Latin America. In addition, the income distribution in Uruguay is one of the most evenly distributed in Latin America according to the World Bank’s Gini Index report, resulting in one of the largest middle classes in Latin America on a per capita basis.
Uruguay’s economic base is its agricultural sector, exporting products such as meat, cellulose, grains, dairy wood, pharmaceuticals, and services. More than 60 percent of Uruguay’s total exports are agricultural-based products. About half of all industrial production is dedicated to food processing or agricultural product refinement. In fact, beef was Uruguay’s number one export product in 2021 with China being Uruguay’s top export destination.
From 2003 to 2019, Uruguay experienced the longest economic expansion in the country’s history. While still positive, economic growth began to slow down in 2014 and decreased to 0.5 percent in 2019 according to the Central Bank of Uruguay. This decline was driven by a fall in commodity prices as well as recessions in both Argentina and Brazil — two of Uruguay’s top trading partners. In 2020, COVID-19 threw the economy into recession for the first time in two decades. GDP fell 5.9 percent in 2020, with a strong negative impact on unemployment and poverty. Despite this, Uruguay’s economy bounced back by growing 4.4 percent in 2021, exceeding the government’s expectations of 3.5 percent growth. Uruguay’s export of goods increased 43 percent in 2021, compared to 2020, reaching historic values. When 2021 is compared with 2019 in terms of export value, Uruguay had 26 percent growth. According to the trade agency, Uruguay XXI, Uruguay´s top 2021 export destinations for goods were China (28 percent), Brazil (16 percent), EU (14 percent), Argentina (5 percent), the United States (5 percent), and Egypt (4 percent). China remains the main destination of Uruguay´s goods exports, a position which they have held since 2013. In 2021, the United States ranked fifth as a destination for Uruguay´s goods for a total of $579 million. In terms of product exports, beef is Uruguay´s main export accounting for 21 percent of total exports, with a value of $2.4 billion, followed by cellulose at $1.5 billion. Soy and dairy are Uruguay’s third and fourth largest goods exports valued at $892 million and $735 million, respectively.
In 2021, Uruguay imported a total of $9 billion in goods (excluding petroleum), a 32 percent increase from 2020. The main product imports were vehicles, totaling $802 million. Agricultural chemicals were second totaling $660 million. Food imports had a strong increase in 2021, coming in third with a value of $526 million. Plastics were fourth with a value of $448 million, followed by $420 million in technology imports. Clothing and footwear imports were sixth, valued at $418 million and pharmaceutical products seventh, amounting to $372 million.
In 2021 Brazil was the main source of Uruguay’s imports representing 23 percent of the total. China was second, with 22 percent. Argentina was third, with 14 percent, and the United States was fourth representing 6 percent of the total.
Top reasons why U.S. companies should consider exporting to Uruguay:
- Uruguay is an institutionally stable democratic country with strong rule of law and a commitment to international agreements and norms.
- Due to its beneficial customs regimes with Mercosur and its strategic location between Argentina and Brazil, Uruguay serves as a regional distribution platform through its free trade zones, free port, and free airport regimes.
- Due to the size of the country (3.4 million people) and the relatively high per capita GDP, Uruguay can function as a test market for those international companies that have no previous experience in the region.
- The bilateral U.S.-Uruguay relationship is strong. Uruguay’s government and business sectors have a favorable view of American business.
Uruguay is also an attractive market for international companies. In terms of foreign direct investment (FDI), Uruguay has received investment from various countries over the past 15 years, demonstrating greater confidence in the country’s institutional framework and economic policies. For more information on FDI into Uruguay, please see the Investment Climate Statement section of this document.