Wealth concentration deepens in Uruguay

RIO DE JANEIRO, BRAZIL – The Association of Bank Employees of Uruguay (AEBU) stated that deposits in accounts reached record figures in 2021, and the concentration of wealth in the country is deepening.

A report of its Technical Advisory Committee found that half of this total growth corresponds to holders of more than a quarter of a million dollars. If those with more than US$100,000 are added, it represents 70% of the deposits.

According to official data from the Central Bank of Uruguay (BCU), the country’s economy is growing and beginning to recover from the crisis generated by the pandemic.

But at the same time, data from the National Institute of Statistics indicate that the average household income experienced a fall greater than that of the Gross Domestic Product in 2020, and the recovery was lower in 2021.

When the ‘cake’ shrank in 2020 by 6%, the portion reaching households shrank by 7%. When the cake began to grow in the three quarters of 2021, by more than 4.2%, the portion reaching households grew less, with 3.6%, the technical commission’s report illustrated.

The union’s analysis points out that “the effects of inflation and the policy that lowers purchasing power have a stronger impact on lower-income groups, who cannot save”.

He added that the poorest 20% of the population have an income that is not enough to cover their monthly consumption; they are strongly affected by inflation, with no maneuvering power.

On the other hand, households of the wealthiest 20% of the population spend little more than 70% of their income on their monthly consumption so that their saving capacity allows them to better face price increases, he contrasted.

The BCU recorded deposits of more than US$6 billion in the two years of the pandemic, which, according to economists, come from exporters, the main beneficiaries amid the health crisis, who also transfer the bulk of their profits to foreign accounts.

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