Salary Boards
Periodic wage adjustments are established by the Salary Boards, which have been established by law and consist of representatives from workers, businesses and the government. Board decisions are carried out per industry sector.
Public finances
State incomes come principally from taxes collected through the DGI (Dirección General Impositiva) tax bureau. However, surpluses from state-owned companies also contribute to public income. Public spending decisions are made through a budget law that is passed during the first year of each administration and adjustments are made in following years.
Whichever the political party in office, responsible fiscal policy has been the norm where primary surplus goals are sought to be in harmony with public debt sustainability. By law, there is a maximum annual limit for new net government debt.
Monetary policy
The Central Bank of Uruguay (BCU) is a technically, administratively and financially autonomous entity. Its primary objectives are:
• Price stability to contribute to economic growth and employment objectives.
• Regulation and supervision of operations of payment and financial systems to promote solidity, solvency, efficiency and development.
Uruguay has stable internal prices with single-digit inflation. To achieve price stability, the Central Bank of Uruguay carries out an inflation goals policy. As an instrument to achieve this goal, the Monetary Policy Committee sets reference interest rates for short-term inter-bank loans.
Financial system
The financial intermediation sector in Uruguay consists of 14 commercial banks, 5 lending institutions, 1 financial intermediation cooperative and 4 external financial institutions.
The commercial bank sector is the largest of the system. State-owned banks include Banco de la República Oriental del Uruguay (Oriental Republic Bank of Uruguay - BROU) and Banco Hipotecario del Uruguay (Mortgage Bank of Uruguay - BHU). The latter was recently reincorporated into the market through the concession of mortgage credits after having ceased operations in the 2002 crisis. The private commercial banking sector in Uruguay consists of 12 foreign capital banks. Deposits and loans are highly dollarized, although the share of dollar-denominated deposits and loans has declined steadily over the last few years.
Uruguay has a reliable financial system with excellent liquidity and solvency ratios and low default levels.
After the regional financial crisis of 2002, deposits have risen steadily. Currently, non-resident deposits in commercial banks account for 23% of all deposits.
2008 economic indicators:
• GDP: USD 32,200 million
• Per capita GDP: USD 9,700
• Merchandise exports: USD 6,000 million
• Average annual inflation: 7.9%
• Average annual unemployment: 7.6%
• Fiscal result / GDP: -1.4%
• Net public debt / GDP: 30%
