The fiscal adjustment policy: the case of Uruguay, successes and failures

From 2005 to 2014 was observed a rapid growth of Gross Domestic Product with rising employment and real wages, but from the next year these trends will slow down or reverse. From 2015 until 2017 was implemented a fiscal adjustment policy which had as its objectives declared, reducing the fiscal deficit and inflation; the main instruments were the control of money supply and the contraction of public investment, price increases of public companies, containment salaries and pensions increases. In a context of falling external demand, economic policy did not propose to compensate it with an increase in domestic demand, which could be achieved with higher wages and taxes on capital to finance an increase in public investment and reduce the fiscal deficit