MONTEVIDEO - Investment is one of the factors behind the average 5 percent annual growth rate posted by the Uruguayan economy over the past decade, Deputy Economy Secretary Pablo Ferreri said.
Investment is the starting point of a "virtuous cycle" because it promotes higher productivity, leading to "very important levels of growth which, in turn, create the conditions to receive new investment," Ferreri said during a real estate conference over the weekend.
"Confidence" is what sustains the cycle, allowing Uruguay to attract foreign and domestic investment, Ferreri said.
The high-level official noted changes in the economic model spurred by investment over the past 10 years, boosting "quality" exports of goods and services that have a higher added value, a factor that was "absolutely relevant."
Uruguay's services exports grew from $500 million a year in 1990 to $4 billion in 2014, Ferreri said.
Exports with a high technological content increased from 20 percent to 40 percent of total overseas sales, while exports with a low technological content decreased, Ferreri said.
President Tabare Vazquez's administration plans to invest $12 billion in infrastructure over the next five years, using government funds and public-private partnerships, Ferreri said.
Port modernization and upgraded freight trains are among the programs included in the government's investment plan, the deputy economy secretary said, adding that these areas were priorities in the budget proposal to be submitted to Congress before Aug. 31.
Infrastructure investments are "counter-cyclical" because they help the country get through economic slowdowns, while increasing the "physical potential" for more growth, Ferreri said.