Front Matter

Front Matter Page

IMF Country Report No. 14/7

URUGUAY

SELECTED ISSUES

January 2014

This Selected Issues Paper for Uruguay was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on October 29, 2013. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of Uruguay or the Executive Board of the IMF.

The policy of publication of staff reports and other documents by the IMF allows for the deletion of market-sensitive information.

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Front Matter Page

URUGUAY

SELECTED ISSUES

October 29, 2013

Approved by

The Western Hemisphere Department

Prepared By Juan Yepez, Garth Nicholls, and Camilo E. Tovar (all WHD), Victor Kitange (FAD), and Natalia Melgar (Montevideo Office), with research assistance from Jesse Siminitz and editorial support from Edward Moreno (both WHD).

Contents

  • AGRICULTURAL LAND PRICES—A CHANNEL IN THE TRANSMISSION OF GLOBAL COMMODITY PRICE SHOCKS ON ECONOMIC ACTIVITY

  • A. Introduction

  • B. Some Stylized Facts

  • C. Food Prices as a Driver of Agricultural Land Prices

  • D. Empirical Results

  • E. Concluding Remarks

  • FIGURES

  • 1. Farmland and Commodity Price Developments

  • 2. Impulse Responses to Commodity Price Shocks (Argentina, Brazil, and Uruguay)

  • 3. Impulse Responses to Commodity Price Shocks (Uruguay)

  • 4. Decomposition of Response to Commodity Price Shocks

  • References

  • COMPETITIVENESS TRENDS IN URUGUAY

  • A. Introduction

  • B. Key Trends in Export Performance in the Last Decade

  • C. External Sector Dynamics

  • D. Relative Price Dynamics

  • E. Real Exchange Rate Assessment

  • F. Conclusion

  • APPENDIX

  • I. Constant Market Share Analysis

  • References

  • FISCAL POLICY AND INFLATION IN URUGUAY: EXPLORING THE NEXUS

  • A. Motivation

  • B. Uncovering the Effect of Fiscal Policy on Inflation

  • C. How Large is the Impact of Fiscal Policy on Inflation?

  • D. Does Inflation Respond to Large Spending Fiscal Shocks?

  • E. Does Fiscal Policy Influence Inflation Expectations?

  • F. Conclusions

  • ANNEX

  • I. Fiscal, Debt, and Inflation Dynamics

  • References

  • THE FISCAL REGIME FOR LARGE-SCALE MINING IN URUGUAY

  • A. Introduction

  • B. Mining Fiscal Regime Review

  • C. Royalty

  • D. Income Tax

  • E. Additional Income Tax

  • F. Competitiveness of the Mining Fiscal Regime

  • G. Conclusions and Recommendations

  • H. Revenue Forecast

  • TABLES

  • 1. Comparison of Royalty Rates for Base Metals (Including Iron-Ore)

  • 2. Income Tax Regime for Mining in a Selection of Countries

  • ANNEXES

  • I. Fiscal Regime for Mining in Uruguay

  • II. Summary of Economic Assumptions

  • III. Summary of Fiscal Regimes Evaluated for Comparison

Uruguay: Selected Issues
Author: International Monetary Fund. Western Hemisphere Dept.