IMF Country Report No. 22/17

Abstract

IMF Country Report No. 22/17

Copyright Page

IMF Country Report No. 22/17

URUGUAY

SELECTED ISSUES

This paper on Uruguay was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on November 11, 2021.

January 2022

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Title Page

URUGUAY

SELECTED ISSUES

November 11, 2021

Approved By

Western Hemisphere Department

Prepared by Natasha Che and Chiara Fratto

Contents

  • URUGUAY’S POTENTIAL GROWTH: WHAT TO EXPECT AFTER THE PANDEMIC?

  • A. A Long-term View on Growth

  • B. Labor and Human Capital

  • C. The Role of the Commodity Price Cycle

  • D. The Effects of the Pandemic on Growth

  • E. Post-Pandemic Growth

  • References

  • FIGURES

  • 1. Hours Worked and Human Capital in Uruguay

  • 2. Recovery from the 2002 Crisis

  • 3. Impulse Responses to a Commodity Export Price Increase

  • TABLES

  • 1. Growth Accounting

  • 2. Growth Accounting. Cross-Country Comparison, 1978–2019

  • 3. Growth Accounting. Difference Between 2014–19 and 2010–14

  • 4. Growth Accounting During the Pandemic

  • 5. Growth Outlook for the Next Five Years

  • STRUCTURAL DETERMINANTS OF INFLATION

  • A. Introduction

  • B. How Structural Factors Can Affect Inflation

  • C. Data and Stylized Facts

  • D. Empirical Method

  • E. Results

  • F. Conclusion

  • References

  • TABLES

  • 1. Summary Statistics of Main Variables

  • 2. Labor Market Flexibility and Inflation

  • 3. Central Bank Institutions and Inflation

  • 4. Fiscal Responsibility and Inflation

  • 5. Estimated Potential Reduction in Inflation

  • 6. Labor Market Flexibility and Inflation Stickiness

  • 7. Central Bank Institutions and Inflation Stickiness

  • 8. Fiscal Responsibility and Inflation Stickiness

  • EXPORT PRODUCT DIVERSIFICATION ANALYSIS FOR URUGUAY WITH MACHINE LEARNING

  • A. Introduction

  • B. Measuring Export Diversification

  • C. Why Uruguay’s Goods Exports Have Become Less Diversified

  • D. Machine Learning Algorithms to Explore Export Diversification Options

  • E. The Application to Uruguay

  • F. Conclusion

  • References

  • FIGURES

  • 1. Number of High-RCA Exports vs GDP Growth and Growth Volatility

  • 2. Export Diversification in Countries of Similar Sizes to Uruguay

  • 3. The Number of High-RCA Exports from Uruguay, 1962–2018

  • 4. Actual and Recommended Export Composition for High-RCA Exports

  • TABLES

  • 1. Summary Statistics of the Algorithm Recommendations

  • 2. Actual and Recommended Export Composition for High-RCA Exports

  • 3. Top 10 SITC 2-digit Categories with Increased Shares in Total

  • 4. Top 10 SITC 2-Digit Categories with Reduced Shares in Total High-RCA

  • 5. Top 20 SITC 4-Digit Product Recommendations with Actual RCA <1

Uruguay: Selected Issues
Author: International Monetary Fund. Western Hemisphere Dept.