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Uruguay Is #27
Uruguay is #27 in Economic Freedom out of 176 Countries.
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Every year the Heritage Foundation, a leading U.S. nonprofit, produces the Index of Economic Freedom Report and ranks how free and open each country’s economy is.
With a score of 69.8, Uruguay is classified as "Moderately Free":
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Evidence clearly shows that greater economic freedom leads to higher standards of living, increased job creation, improved education and healthcare, greater prosperity, and enhanced environmental stewardship.
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What Does Being “Moderately free” Mean for Uruguay?
Uruguay's "Moderately Free" classification on the Index of Economic Freedom indicates a generally open economy with robust institutional foundations but also reveals some restrictive areas that prevent full economic liberty. For the average Uruguayan, this classification means access to reliable legal protections and government integrity but also notable limitations in financial services and labor market flexibility, which can hinder economic growth and personal financial mobility.
What categories doES Uruguay DO well in?
To do well ("mostly free") a country must score 70 - 79.9. To classify as excellent ("free") a country must score 80 or higher. Uruguay scores relatively well in these areas (scores out of 100):
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Property Rights 84.8
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Business Freedom 83.9
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Judicial Effectiveness 81.1
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Government Integrity 78.1
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Fiscal Health 75.9
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Tax Burden 73.8
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Government Spending 71.6
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Trade Freedom 71.2
Solutions
Uruguay's worst 3 categories:
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Financial Freedom 30.0
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Investment Freedom 60.0
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Labor Freedom 61.0​
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Financial Freedom in Uruguay scores a low 30.0 out of 100, reflecting restrictions in the banking and financial sectors, including regulatory constraints that may limit access to credit. This score affects citizens by reducing opportunities for personal and business financing, which can curb entrepreneurship and restrict economic mobility. Improving this category could involve easing regulatory controls, encouraging competitive banking practices, and supporting policies that expand access to financial services for all citizens.
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Investment Freedom in Uruguay is scored at 60.0 out of 100, indicating barriers for both domestic and foreign investments. This score means that Uruguayans and foreign investors face limitations and bureaucratic challenges, potentially reducing job creation and capital inflows into the economy. To boost investment freedom, Uruguay could streamline investment regulations, enhance incentives for foreign investors, and reduce administrative barriers that slow down the investment process.
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Labor Freedom in Uruguay stands at 61.0 out of 100, highlighting regulatory rigidity in hiring and employment practices. For the workforce, this means less flexibility in adapting to market changes, which can stifle job growth and limit wage competitiveness. Addressing this could involve easing hiring and firing restrictions, supporting more flexible labor agreements, and promoting policies that allow for a dynamic labor market that benefits both employers and employees.
Uruguay's Economic Freedom over time:
