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Economic Survey of Latin America and the Caribbean 2009-2010

The Distributive Impact of Public Policies

image of Economic Survey of Latin America and the Caribbean 2009-2010

In 2009, the countries of Latin America and the Caribbean experienced the brunt of the global financial crisis on their levels of activity. However, since the second half of the that year, most countries in the region just begun a vigorous recovery that should strengthen with a regional GDP expansion of approximately 5.2 per cent. The factors behind a more positive performance are both external and internal in nature. Amongst the former can be included the continued dynamism of some key Asian economies, whose sustained demand for products from this region has created important conditions for a recovery in exports, especially in the case of South America.

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Uruguay

Uruguay posted a 2.9% rise in GDP in 2009, making it one of the few economies in the region to remain on a growth path despite the international financial crisis. This growth was driven by private and public consumption, public investment and external demand, which offset the steep drop in private investment. The most buoyant sectors were once again transport, storage and communications, while industry contracted sharply owing to lower exports. A countercyclical fiscal policy was operated throughout 2009 to restrain demand and output. The non-financial public sector (NFPS) fiscal deficit rose to 1.6% of GDP, while the gross debt to GDP ratio of the NFPS reached 47%. Annual inflation was 5.9%, which was within the target range established in the monetary programme.

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