Uruguay has made remarkable progress over the past decade. Stable macroeconomic policies
and a favourable external environment have permitted brisk growth and the financing
of social policies. Substantial improvements in several dimensions of human well-being
have occurred during this period, alongside considerable reductions in external risks.
The conditions ahead, however, may present challenges to maintaining performance.
Overcoming these challenges will require finding the appropriate balance between long
run objectives and macroeconomic and fiscal stability.
One of the main obstacles to economic growth is the insufficient and inadequate provision
of human capital and skills. A number of challenges remain for education, which, together
with fiscal policy, are key means of reducing inequalities and sustaining economic
growth. In addition, Uruguay needs to address labour shortages to avoid constraints
on future growth, especially as exports become more skills-intensive. It is important
to orient social policies and expenditures towards the most vulnerable groups.
Published on August 14, 2014Also available in: Spanish
Measuring Individual well-being: Uruguay and the World
Note: Bivariate regressions are run with the relevant well-being measures as the dependent variable and GDP per capita as the independent variable to estimate a coefficient for the relationship between GDP and the outcome in question. The coefficient is then applied to Uruguay’s actual GDP per capita to produce an expected value for the outcome. Uruguay’s actual well-being outcome is expressed as a ratio of the expected outcome measured in standard deviations. This sample contains 130 countries with a population over a million.