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The Uruguayan Experience with Liberalization and Stabilization, 1974-1981

Published online by Cambridge University Press:  02 January 2018

James Hanson  and
Jaime de Melo
James Hanson
Affiliation:
World Bank, Washington, DC
Jaime de Melo
Affiliation:
World Bank, Washington, DC
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Extract

After a period of economic stagnation that lasted from the late 1950s to the mid-1970s, Uruguayan economic growth took off. Between 1974 and 1981 real GDP growth averaged 3.8% per annum (p.a.) versus .7% p. a. between 1956 and 1974. Yet, in 1974 Uruguayan prospects appeared rather dismal—inflation was high and accelerating, the fiscal deficit amounted to 4.5% of GDP, international reserves were largely exhausted, the debt service ratio exceeded 40%, the terms of trade were falling as a result of the oil price rise, and the EEC had just cut off imports of Uruguayan beef. How Uruguay achieved a dramatic turnaround in the face of these poor initial conditions is an interesting case study in the role of stabilization cum liberalization programs.

Type
Research Article
Information
Journal of Interamerican Studies and World Affairs , Volume 25 , Issue 4: Special Issue: Economic Experiments in the Southern Cone, 1974-1982 , November 1983 , pp. 477 - 508
Copyright
Copyright © University of Miami 1983

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