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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©2014 International Monetary Fund
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