The new democratic government in Uruguay took office on 1 March 1985 after the country had been ruled for 11 years by a defacto regime. The new authorities implemented an economic policy based on gradual action against inflation, emphasizing stability in financial and balance-of-payments matters whilst combining adjustments in domestic demand with an incomes policy aimed at recovering the past levels of real wages. In this way, backed up by the restructuring of external commitments and the refinancing of the domestic debt, it was hoped that the economy would first be reactivated and would then tend to grow steadily. The export sector was to constitute the pivot of their revitalization process.

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