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Uruguay’s budget deficit in 2009, highest since 2003 pushed by energy costs

Monday, February 1st 2010 - 06:09 UTC
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A prolonged drought forced Uruguay to buy power from neighbours A prolonged drought forced Uruguay to buy power from neighbours

Uruguay’s 2009 fiscal budget deficit soared to its highest since 2003 pushed by higher power generation costs and the import of dearer energy according to the official release from the Ministry of Finance. The total is equivalent to 2.1% of GDP and 50% higher than in 2008, which was 1.4% of GDP.

However the overall percentage is below the original estimate from Uruguayan authorities which has anticipated a 2.4% GDP deficit, which includes 1.1 percentage points because of the power over-costs.

Primary surplus, (which does not include interest payments) was equivalent to 0.52% of GDP.

Overall in 2009 revenue in real terms increased 8.96% while expenditure, 10.95% mainly because of transfers to Social Security, both to help pay for pensions and investments in the area.

Non financial public sector expenditure was equivalent to 26.2% of GDP in 2009, down 0.1 percentage point compared to 2008. December 2009 was a particularly negative month representing an increase of 0.1 percentage point of GDP for the overall budget performance.

Payments of public debt interests were equivalent to 2.6% of GDP, almost similar to the lump sum of 2008.

Regarding government owned corporations, a significant presence in the Uruguayan economy, power generation and distribution monopoly UTE, experienced losses of 210 million US dollars and ANCAP, responsible for fossil fuels and refining, lost 88 million USD. The Housing department red numbers were 23 million USD; the port authority, 10 million USD and the waterworks, 2 million USD.

All these companies usually manage strong surpluses which help central government finances. The only corporation that had an acceptable performance was Antel, the fixed phones monopoly with 133 million USD.

Categories: Economy, Uruguay.

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