The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
The paper examines the extent to which the recent evolution of the consolidated public sector balance in Uruguay reflects the business cycle. Fiscal policies have generally been cautious, even though some structural reforms, the electoral cycle, and recessions in recent years increased the deficit. Bank soundness indicators differ substantially between private and public banks in Uruguay. The private banking system appears sound. Public banks did not fare as well during the recession, and their soundness needs to be addressed.