Uruguay expanded 6% in 2011 and fiscal deficit dropped to 0.8% of GDP

Tuesday, January 24th 2012 - 04:05 UTC

Full article 3 comments

Finance Minister Fernando Lorenzo said that Uruguay’s economy in 2011 expanded an estimated 6%, the ninth year running of sustained growth, and the budget fiscal deficit was 0.8% of GDP. Read full article

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laceja
“... and finally government managed public utility companies addressed their costs by increasing service rates.”

Now, that just makes no sense whatsoever! You do not contain costs, by raising your rates. You can only “address costs” by, “reducing” costs, not raising the rates you charge.
Jan 24th, 2012 - 02:36 pm - Link - Report abuse 0
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ChrisR
1 laceja
You beat me to it!

This is why Uruguay has got a massive fiscal drag on the economy. Try reading the Antel report: it nearly made me cry. The senior management think they are doing a good job by defending inroads into the market by commercial organisations (Movistar, etc).

These people have no concept of running a modern business.

If the government really wanted to get the country moving FINANCIALLY they would get rid of half of the government service employees (not teachers or police) and train them into productive people to work for industry. This would halve the govt. wage bill (obviously) and probably increase the REAL tax take by 25% (I need govt figures to be sure). To encourage new investment the govt would have to offer incentives for start-ups by subsidising workers wages for the first 12 months or so, but after that the new tax take would more than make up for them.

Who pays for the tax paid for by govt. employees?

If you do not know and you DO NOT work for the govt.: IT IS YOU!!!
Jan 24th, 2012 - 07:02 pm - Link - Report abuse 0
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laceja
ChrisR, you are definitely right on! I do like one thing about the tax system in Uruguay. If you start a company, that derives all its revenue from outside of Uruguay, it is tax free. Now, if they would just offer some encouragement for training new employees for that business, they would really have something.
Jan 24th, 2012 - 09:26 pm - Link - Report abuse 0
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