ef of mission: Ambassador Thomas J. DODD
embassy: Lauro Muller 1776, Montevideo
mailing address: APO AA 34035
telephone: [598] (2) 23 60 61, 48 77 77
FAX: [598] (2) 48 86 11

Flag: nine equal horizontal stripes of white (top and bottom)
alternating with blue; there is a white square in the upper
hoist-side corner with a yellow sun bearing a human face known as
the Sun of May and 16 rays alternately triangular and wavy

Economy
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Economic overview: Uruguay's small economy benefits from a
favorable climate for agriculture and substantial hydropower
potential. Economic development has been restrained in recent years
by high - though declining - inflation and extensive government
regulation. The SANGUINETTI government's conservative monetary and
fiscal policies are aimed at continuing to reduce inflation,
currently at 35.4%; other priorities include extensive reform of the
social security system and increased investment in education.
Uruguay went into recession during second quarter 1995 and ended the
year with an estimated 2% fall in GDP and a two percentage point
rise in unemployment to 11%. This was partly due to Argentina's
recession and the slowdown in Brazilian growth in 1995, which
contributed to declines in the Uruguayan manufacturing,
construction, and service sectors. However, despite its Mercosur
(Southern Cone Common Market) partners' troubles, Uruguayan trade
expanded and potential new markets are being explored through
Mercosur negotiations with neighboring countries and the European
Union (EU). Uruguay also recently augmented its transport and
agricultural sector ties with the US. The economy is expected to
come out of recession as regional growth prospects improve.

GDP: purchasing power parity - $24.4 billion (1995 est.)

GDP real growth rate: -2.4% (1995 est.)

GDP per capita: $7,600 (1995 est.)

GDP composition by sector:
agriculture: 10.5%
industry: 27.5%
services: 62% (1994)

Inflation rate (consumer prices): 35.4% (1995 est.)

Labor force: 1.355 million (1991 est.)
by occupation: government 25%, manufacturing 19%, agriculture 11%,
commerce 12%, utilities, construction, transport, and communications
12%, other services 21% (1988 est.)

Unemployment rate: 11% (1995)

Budget:
revenues: $3.03 billion
expenditures: $3.37 billion with capital expenditures of $NA (1994
est.)

Industries: meat processing,