República Oriental del Uruguay

República Oriental del Uruguay Ministry of Economy and Finance August 2015 Montevideo

Uruguay at a Glance Population 13 3.3Million Total surface area 176,215 km 2 Human Development Index GDP 2014 51 st over 186 th US$ 57.5 Billion GDP p/capita 2014 US$ 17,450 (Upper Income Economy / WB) Real Growth Rate 15 (e) 2.5% Real Growth Rate 05-14 5.4% Unemployment Rate 6.8% Ratings Baa2 / BBB / BBB- 1

Credit Highlights 1 Structural Stability Robust institutional framework and healthy social indicators continue to underpin political stability and promote a prolific business climate 4 Proactive Debt Management Strategy Longest-dated sovereign maturity profile in the region thanks to proactive liability management transactions. Consolidation of the pre-funding policy 2 Significant Economic Growth Based on a strong growth of productivity, regional decoupling process is deepening 3 Consistent Macroeconomic Policies and Healthy External Indicators Sustainable growth supported by robust FDI expansion and increase in export revenue. Improvement in the terms of trade in the near term 2

Structural Stability Economic Performance External Sector Fiscal, Banking & Monetary Sector Debt Management

Structural Stability

Recognized Social and Institutional Stability (Ranking position in LATAM and Worldwide, respectively) Democracy Index (The EIU 2014) LATAM 1 st 1 st WORLD Corruption Perception Index (Transparency International 2014) Worldwide Governance Indicators (World Bank 2013) 18 th 19 th 2 nd - 1 st 30 th Prosperity Index (Legatum Institute 2014) Economic Climate Index (Getulio Vargas Foundation & IFO 2015 - Last 10 Years Average) - 1 th 3 rd 29 th 23 rd 43 th Economic Freedom Index (Heritage Foundation 2015) Global Peace Index 1 st 2 nd Press Freedom Index (Institute for Economics & Peace 2014) (Reporters without Frontier 2015) 3

Rule of Law: Closer to High Income Countries Country Score Global Ranking Denmark 0.87 1 Norway 0.87 2 Sweden 0.85 3 Finland 0.85 4 Netherlands 0.83 5 New Zealand 0.83 6 Austria 0.82 7 Germany 0.81 8 Singapore 0.81 9 Australia 0.8 10 Republic of Korea 0.79 11 United Kingdom 0.78 12 Japan 0.78 13 Canada 0.78 14 Estonia 0.77 15 Belgium 0.77 16 Hong Kong SAR, China 0.76 17 France 0.74 18 United States 0.73 19 Czech Republic 0.72 20 Poland 0.71 21 Uruguay 0.71 22 Portugal 0.7 23 Spain 0.68 24 Costa Rica 0.68 25 Chile 0.68 26 United Arab Emirates 0.67 27 Slovenia 0.66 28 Georgia 0.65 29 Italy 0.64 30 Botswana 0.64 31 Romania 0.62 32 Greece 0.6 33 Ghana 0.6 34 Country Score Global Ranking Croatia 0.6 35 South Africa 0.58 36 Hungary 0.58 37 Senegal 0.57 38 Malaysia 0.57 39 Bosnia and Herzegovina 0.57 40 Jordan 0.56 41 Jamaica 0.56 42 Tunisia 0.56 43 Macedonia, FYR 0.55 44 Bulgaria 0.55 45 Brazil 0.54 46 Mongolia 0.53 47 Nepal 0.53 48 Panama 0.53 49 Belarus 0.53 50 Philippines 0.53 51 Indonesia 0.52 52 Albania 0.52 53 Argentina 0.52 54 Morocco 0.52 55 Thailand 0.52 56 El Salvador 0.51 57 Sri Lanka 0.51 58 India 0.51 59 Serbia 0.5 60 Malawi 0.5 61 Colombia 0.5 62 Peru 0.5 63 Vietnam 0.5 64 Kazakhstan 0.5 65 Belize 0.49 66 Dominican Republic 0.48 67 Lebanon 0.48 68 Uruguay Country Score Global Ranking Moldova 0.48 69 Ukraine 0.48 70 China 0.48 71 Tanzania 0.47 72 Zambia 0.47 73 Kyrgyzstan 0.47 74 Russia 0.47 75 Cote d'ivoire 0.47 76 Ecuador 0.47 77 Burkina Faso 0.47 78 Mexico 0.47 79 Turkey 0.46 80 Uzbekistan 0.46 81 Madagascar 0.45 82 Liberia 0.45 83 Kenya 0.45 84 Guatemala 0.44 85 Egypt 0.44 86 Sierra Leone 0.44 87 Iran 0.43 88 Nicaragua 0.43 89 Honduras 0.42 90 Ethiopia 0.42 91 Myanmar 0.42 92 Bangladesh 0.42 93 Bolivia 0.41 94 Uganda 0.41 95 Nigeria 0.41 96 Cameroon 0.4 97 Pakistan 0.38 98 Cambodia 0.37 99 Zimbabwe 0.37 100 Afghanistan 0.35 101 Venezuela 0.32 102 Overall Score Regional Rank Income Rank Global Rank 0.71 1/19 22/31 22/102 Factor Trend Factor Score Regional Rank Income Rank Global Rank Constraints on Government Powers 0.76 2/19 19/31 20/102 Absence of Corruption 0.78 1/19 18/31 18/102 Open Government 0.65 3/19 20/31 21/102 Fundimental Rights 0.79 1/19 16/31 16/102 Order and Security 0.72 1/19 29/31 57/102 Regulatory Enforcement 0.73 1/19 19/31 19/102 Civil Justice 0.71 1/19 17/31 17/102 Criminal Justice 0.54 3/19 29/31 36/102 Source: World Justice Project Trending up Trending down High Medium Low 4

2000 2005 2013 2000 2005 2013 2000 2005 2013 2000 2005 2013 2000 2005 2013 Significant Decrease in Poverty and Healthier Income Distribution Poverty Gini Coefficient 2013 % of the total population Values between 0 and 1 60,0 50,0 0,6 0,5 0,55 0,54 0,51 0,44 40,0 0,4 0,38 30,0 0,3 20,0 0,2 10,0 0,1 0,0 BRAZIL (BBB) CHILE COLOMBIA (BBB) PERU URUGUAY (BBB-) 0,0 BRAZIL (BBB) COLOMBIA (BBB) CHILE PERU URUGUAY (BBB-) Source: Economic Commission for Latin America and the Caribbean, Statistical Yearbook for Latin America and the Caribbean 2013 5

Economic Performance

Bolivia Paraguay Peru Colombia Mexico Brasil Panama Argentina Chile Uruguay Uruguay s Economy is Expected to Keep Growing GDP Growth Rate (%) GDP per Capita (US$, 2014) 9% 20.000 8% 17.450 7% 6% 15.000 12.777 11.799 10.836 11.076 14.911 5% 10.000 8.394 4% 3,5% 6.625 3% 2,5% 5.000 3.030 4.535 2% 1% 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F Average 1985-2004: 3.3% Average annual growth rate of 5.4% between 2005 and 2014 was 50% explained by TFP growth Source: Central Bank of Uruguay, IMF (WEO October 2014) and Ministry of Economy and Finance estimates. *TFP: Total Factor Productivity 6

IMF Revised Down Economic Growth in South America for 2015; Uruguay with Marginal Review WEO April 2014 WEO April 2015 Selected Western Hemisphere Economies: Real GDP Western Hemisphere Economies: Real GDP (Annual percent change unless noted otherwise) Real GDP Projections 2013 2014 2015 North America 1.8 2.8 3.0 United States 1.9 2.8 3.0 Canada 2.0 2.3 2.4 Mexico 1.1 3.0 3.5 South America 3.2 2.3 2.7 Brazil 2.3 1.8 2.7 Argentina 4.3 0.5 1.0 Colombia 4.3 4.5 4.5 Venezuela 1.0-0.5-1.0 Peru 5.0 5.5 5.8 Chile 4.2 3.6 4.1 Ecuador 4.2 4.2 3.5 Bolivia 6.8 5.1 5.0 Uruguay 4.2 2.8 3.0 Paraguay 13.0 4.8 4.5 Central America 4.0 4.0 4.0 Caribbean 2.8 3.3 3.3 Memorandum Latin America and the Caribbean 2.7 2.5 3.0 Excluding Argentina 2.5 2.8 3.2 Eastern Caribbean Currency Union 0.5 1.4 1.8 (Annual percent change unless noted otherwise) Real GDP Projections 2014 2015 2016 North America 2.4 3.0 3.0 United States 2.4 3.1 3.1 Canada 2.5 2.2 2.0 Mexico 2.1 3.0 3.3 South America 0.7 (0.2) 1.3 Brazil 0.1 (1.0) 1.0 Argentina 0.5 (0.3) 0.1 Colombia 4.6 3.4 3.7 Venezuela (4.0) (7.0) (4.0) Chile 1.8 2.7 3.3 Peru 2.4 3.8 5.0 Ecuador 3.6 1.9 3.6 Bolivia 5.4 4.3 4.3 Uruguay 3.3 2.8 2.9 Paraguay 4.4 4.0 4.0 Central America 4.0 4.2 4.3 Caribbean 4.7 3.7 3.5 Memorandum Latin America and the Caribbean 1.3 0.9 2.0 Excluding Argentina 1.4 1.0 2.2 Eastern Caribbean Currency Union 1.7 2.0 2.1 Source: IMF 7

2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 A Very Well Diversified Economy GDP Breakdown by Sector 2014 Real GDP Growth and Contribution by Sector (QoQ) 12% Primary sector 7,6% 10% Other services 29,0% Manufacturing 12,3% 8% Energy 2,3% 6% 4% Construction 9,3% 2% Real estate 15,9% Financial services 4,7% Transportation and communications 5,9% Commerce, restaurants and hotels 13,0% 0% (2%) Private Consumption Gross Private Investment Gross Public Investment Gov. Consumption Net Exports GDP Growth Source: Central Bank of Uruguay 8

Investment has been a Key Driver of Growth Over the Past Years 25 Total Investment (% of GDP) 20 Average 2005-2014: 20.0% 15 Average 1985-2004: 14.6% 10 5 0 1985 1989 1993 1997 2001 2005 2009 2013 Source: Central Bank of Uruguay 9

even Though Uruguay has not Benefited as much from the Improvement in ToT Over the Past Decade GDP Growth and Terms of Trade 2005/2012 (Annual Average in %) GDP Growth 7 Peru 6 Uruguay 5 4 Chile Colombia 3 Mexico Brazil 2 1 0 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 Source: World Bank Terms of Trade Growth 10

Decoupling from the Regional Downturn has Become More Visible in the Last Few Years Real GDP Growth (2012-2014 (Average) Real GDP Growth (2015 (1) ) 4,5 4,0 4,0 3,0 2,5 2,5 3,5 2,0 1,5 3,0 1,0 2,5 0,5 2,0 0,0 1,5 1,0 1,2 0,7 (0,5) (1,0) (1,5) (1,0) 0,5 0,0 Uruguay Brazil Argentina (2,0) (2,5) (2,0) Uruguay Brazil Argentina Uruguay continues to grow faster than its neighbours Source: Central Bank of Uruguay 1. Market projections 11

Solid Growth Performance has been Accompanied by a Rising Employment Rate Unemployment and Employment Rates (in %) 61 13 60 12 59 11 58 10 57 9 56 55 8 54 7 53 6 52 mar-06 mar-07 mar-08 mar-09 mar-10 mar-11 mar-12 mar-13 mar-14 mar-15 Employment Unemployment 5 Source: National Bureau of Statistics 12

External Sector

II.2004 II.2005 II.2006 II.2007 II.2008 II.2009 II.2010 II.2011 II.2012 II. 2013 II.2014 Structural Increase in Investment Levels Total Investment (% of GDP) 30% 25% 20% Average 2005-2014: 20.0% 15% Average 1985-2004: 14.6% 10% 5% 0% 1985 1989 1993 1997 2001 2005 2009 2013 FDI and Current Account Balance (% of GDP) FDI (% of GDP) 9% 8% 7% 6% Average 2005-2014: 5.7% 5% 4% 3% 2% Average 1985-2004: 0.8% 1% 0% (1%) 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Net FDI 2014 (% of GDP) 8% Units 6% 4% 2% 0% (2%) (4%) (6%) (8%) 6% 5% 4% 3% 2% 1% 0% 2.5% 3.3% 3.4% 4.6% 5.3% Current account FDI Financial Needs Source: Central Bank of Uruguay FDI: Foreign Direct Investment - CAD: Current Account Deficit Source: Source: Standard & Poor s 13

Significant FDI Inflows from a Broad Group of Countries Joint press release with the Ministry of Foreign Affairs Signing of the Japan-Uruguay Investment Agreement On January 26, 2015, H.E. Ms. Keiko Tanaka, Ambassador Extraordinary and Plenipotentiary of Japan to Uruguay, and H.E. Mr Luis Alberto Porto, Acting Minister of Foreign Affairs of the Oriental Republic of Uruguay, signed the Agreement between Japan and the Oriental Republic of Uruguay for the Liberalization, Promotion and Protection of Investment (Japan Uruguay Investment Agreement) in Montevideo, Uruguay 14

Beneficial Investment Promotion Systems Domestic and foreign investors are treated equally 1998 2007 2008 2009 2010 2011 2012 Attractive investment promotion system that grants specific guarantees to the investor Exemptions from taxes for up to 100% of the amount invested Free transferability of capital and profits overseas 1998 Investment Law (Law N o 16,906) There is no discrimination between foreign and domestic investors Prior authorisation or registration are not required There are no restrictions to capital and profit transfers from foreign investments No price or exchange rate controls No restrictions on hiring foreign staff Fiscal and Banking Secrecy 2007 Decree N o 455/007 Including: Universal benefits for all types of companies and activities Objective and measurable criteria for the granting of tax exemptions Intellectual Property Laws under the WTO Residency permits can be obtained in three months 2012 Decree N o 2/2012 Introduction of quality criteria in the promoted objectives 15

Exports have Remained Robust, Although Showing Some Deceleration. Million of USD 14.000 Good Exports / Service Exports 12.000 10.000 8.000 6.000 4.000 2.000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Good Exports Services Exports Million of USD 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 Tourism / Other Services 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Tourism Other services (software, transport, logistics, etc) Source: Central Bank of Uruguay 16

Exports Market Diversification Along with Decreased Dependence from Argentina and Brazil Exports Breakdown By Markets 1995 2014 Others 25% Brazil 33% Spain 3% Brazil 18% Netherlands 3% Others 33% Italy 3% UK 4% Germany 6% USA 6% China 6% Argentina 13% China 17% Germany 3% USA 5% Russia 3% Venezuela 5% Argentina 4% Free Trade Zones 12% Source: Central Bank of Uruguay & Uruguay XXI 17

Current Account Deficit Moderating Thanks to Drop in Oil Prices Latin America: Oil (Energy)-linked Components of the Balance of Payments and Current Account Forecast Last Available (4Q Sum) Curr. Acc. Bal. Net % GDP Energy Trade Balance Other Energy Flows Exports Imports FDI (or debt) Dividends Energy BoP % GDP % Total % GDP %Total % GDP %Total % GDP %Total % GDP % GDP % GDP 2014 est. 2015 fcst Latin America 1.9 4.2 21.0 2.4 16.0 0.3 10.2 0.1 3.4 2.0 (2.9) (3.7) Oil-dependent 2.0 2.2 7.0 0.2 1.3 0.0 2.5 0.0 0.0 2.0 0.2 (0.5) Venezuela 26.9 30.1 96.2 3.2 18.0 0.6 35.0 0.0 0.0 27.5 3.0 (6.8) Large net oil exporters 0.6 0.9 5.6 0.2 1.4 0.1 3.2 0.1 2.5 0.6 (0.4) (0.5) Ecuador 7.7 13.7 52.0 6.0 24.0 0.3 45.0 na na 8.0 (0.6) (3.0) Colombia 7.1 9.0 67.2 1.9 14.0 1.3 35.0 1.6 35.0 6.8 (5.2) (6.5) Limited net oil exposure (0.4) 1.2 8.4 1.6 12.2 0.1 4.5 0.0 0.9 (0.3) (2.6) (2.7) Mexico 0.2 2.4 11.5 2.2 10.5 0.0 0.2 0.0 0.0 0.2 (2.1) (2.5) Peru (0.6) 2.6 12.2 3.2 14.4 0.3 3.0 0.0 0.0 (0.3) (4.1) (4.0) Brazil (0.8) 1.2 11.3 1.9 18.4 0.1 5.4 na na (0.6) (4.4) (4.3) Argentina (1.3) 0.9 6.0 2.2 16.0 0.6 22.5 0.2 10.0 (0.9) (1.1) (1.5) Large net oil importers (0.3) 0.0 0.0 0.3 1.1 0.0 0.0 0.0 0.0 (0.3) (0.1) 0.1 Uruguay (3.4) 0.0 0.0 3.4 15.7 0.0 0.0 0.0 0.0 (3.4) (4.5) (3.6) Chile (4.7) 0.0 0.0 4.7 18.1 0.0 0.0 0.0 0.0 (4.7) (1.1) (0.4) Aggregate figures are % of Latam GDP, country-specific figures are % of country GDP Source: National statistics agencies, central banks, J.P. Morgan Source: LATAM Microeconomic Outlook/JP Morgan May 2015 18

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 The Ministry Estimates a Significant Improvement in the Current Account Balance During 2015 1.800 Oil Imports (USD Million) Oil imports represented 2.4% of GDP in 2014, 13% of total imports of goods 1.600 1.400 1.200 1.375 Most of the drop of oil imports between 2012 and 2014 is because of volume (more rain and more renewable energy sources), not because of prices 1.000 800 600 922 In 2015, a 10% increase in imports volume and a 33% decrease in imports prices would result in a net decrease of USD 453 million in oil imports (0.8% of GDP) 400 200 0 Source: BCU and own estimations. / Oli Barrel estimated at USD 60 19

Comfortable External Liquidity Position USD Million 20.000 16.000 12.000 8.000 International Reserves (1) International Reserves / GDP (2) (as of January 2015) 18.202 35% 29,9% 30% 25% 20% 17,1% 15% 12,8% 14,4% 10% 32,3% 4.000 0 2002 2004 2006 2008 2010 2012 2015YTD 5% 0% Colombia Chile Brazil Peru Uruguay Change in International Reserves [ ] USD Million 70.000 30% 380.000 60.000 50.000 46% 11% 370.000 40.000 30.000 69% 360.000 6% 20.000 10.000 0 Jan-12 Jan-15 Jan-12 Jan-15 Jan-12 Jan-15 Jan-12 Jan-15 Peru Colombia Chile Uruguay 350.000 340.000 Jan-12 Brazil Jan-15 1. Source: Central Bank of Uruguay 2. Source: IMF, World Economic Outlook Database and Central Banks 20

Bolivia Uruguay Peru Chile Paraguay Brazil Mexico Costa Rica Nicaragua Honduras Colombia Guatemala El Salvador Suriname Panama Argentina Ecuador Venezuela International Reserve Buffers have Increased in most LAC Countries, Standing out Uruguay s Position Foreign Exchange Reserves, % of GDP 45 International Reserve Buffers have Increased in Most Countries 40 35 30 25 20 15 10 5 0 2006 2010 2015F 2015 Median Source: Moody s Sovereign Outlook - Latin America: Credit profiles stabilizing amid lower growth, moderate external vulnerabilities March 2015 21

Fiscal, Banking & Monetary Sector

Sustainable Fiscal Policy Decreased Public Net Debt-GDP Ratio Global Fiscal Result (% of GDP) Global Public Debt (% of GDP) 5% 100% 3% 80% 72% 1% 1,2% 1,9% 2,0% 60% 59% 56% 61% 58% 58% 63% (1%) (3%) (1,7%) (1,1%) (0,9%) (0,2%) (2,8%) 0,4% (2,3%) (0,6%) (0,3%) (3,5%) (3,5%) 40% 20% 35% 31% 27% 26% 23% 21% 22% (5%) 2009 2010 2011 2012 2013 2014 2015 (E) 0% 2009 2010 2011 2012 2013 2014 2015E Overall Public Sector Balance Primary Balance Gross debt Net debt Source: Ministry of Economy and Finance and Central Bank 22

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sound Banking System Deposits of Residents and Non Residents in Foreign Currency Deposits in Foreign Currency USD Million 20.000 (% of total deposits) 100% 16.000 12.000 8.000 4.000 90% 80% 70% 0 2000 2001 2002 2003 2004 2005 2006 2007 2009 2010 2011 2012 2013 2014 60% (% of total deposits in FC) 50% Residents Non-residents Non Residents Deposits in Foreign Currency (% of total clients) 80% Non Financial Sector Credits in Foreign Currency 40% 30% 20% 10% 70% 60% 50% 0% 40% Source: Central Bank of Uruguay 23

Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Inflation is Decelerating on the Back of Central Bank s Restrictive Monetary Policy Consumer Prices Evolution 12% Inflation Expectations Observed Inflation CBU Target CBU Monetary Interest Rate 10% 8% 6% 4% 2% 0% Source: Central Bank of Uruguay and National Bureau of Statistics 24

2011Q 1 2011Q 2 2011Q 3 2011Q 4 2012Q 1 2012Q 2 2012Q 3 2012Q 4 2013Q 1 2013Q 2 2013Q 3 2013Q 4 2014Q 1 2014Q 2 2014Q 3 2014Q 4 2015Q 1 8,6% 12,2% 24,0% 23,9% Inflation is Decelerating on the Back of Central Bank s Restrictive Monetary Policy (YoY) 30 M1 M1 Plus Domestic Saving Deposits 25 20 15 10 5 0 Source: Central Bank of Uruguay and National Bureau of Statistics 24

Debt Management

Ample Liquidity to Manage Potential Disruptions in Global Financial Conditions (% of GDP) 10% 8% 6% 3.5% 4% 2% 4.3% 1.2% 1.3% 0% 2015Q2 2015Q2 2016 Central Government Liquid Assets as of June 2015 Contingent Lines Amortizations Contingent Credits Lines Amount to Nearly USD 2bn, around 3.5% of GDP IDB USD 550 million World Bank USD 520 million FLAR USD 470 million CAF USD 400 million Source: Debt Management Unit, Ministry of Economy and Finance 25

More conservative prefunding policy The market should be closed no more than 270 days with probability 99% The market should be closed no more than 90 days with probability 99% 25% 25% 20% 20% 15% 15% 10% 10% 5% Significance Level: 1% 5% Significance Level: 1% 0% 1 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 0% 1 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 Likelihood to be out of the market Likelihood to be out of the market (in days) January 1999 January 2008 January 2007 June 2015 Assumption: i) Uruguay was not willing to borrow at levels of 200bps over EMBI+ or ii) EMBI+ traded 20% or more above its long term trend Assumption: i) Uruguay was not willing to borrow at equivalent levels of the EMBI+ Source: A Note on the Optimal Precautionary Reserves of the Uruguayan Treasury: an Access-at-Risk Approach». Umberto DellaMea (2008) 26

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Proactive Debt Management of Central Government has Reduced Roll-over, FX and Interest Risk Central Government Debt Amortization Profile As of December 2004 (USD Million) 2.000 1.500 2005: 6.4% of GDP 2006: 9.0% of GDP Average life 7.4 years 1.000 500 0 As of June 2015 (USD Million) 2.000 2015: 1.2% of GDP 2016: 1.3% of GDP Average life 15.5 years 1.500 1.000 500 0 Source: Debt Management Unit, Ministry of Economy and Finance 27

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Q1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Q1 Proactive Debt Management of Central Government has Reduced Roll-over, FX and Interest Risk Average Time to Maturity (in Years) 18 16 14 12 10 8 6 4 2 0 7,4 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Q1 15.5 Debt in Local Currency (% of Total) Debt at Fix Rate (% of Total) 60 50 49 100 80 77 94 40 30 20 10 11 60 40 20 0 0 Source: Debt Management Unit, Ministry of Economy and Finance 28

Uruguay has been after Chile the LAC Sovereign that Improved the Most Particularly in relation to debt exposure to foreign currency over the last decade Foreign Currency Share of Government Debt: 2014 vs 2005 FX Government Debt (% of Total, 2014E) 100% Credit Negative 90% Bermuda Nicaragua 80% Belize 70% 60% Argentina Suriname SVG Guatamala Dominican Republic Honduras Paraguay 50% Jamaca Bolivia Peru Uruguay 40% Venezuala 30% 20% Bahamas Trinidad & Tobago Barbados Costa Rica Colombia Mexico Chile 10% Brazil Credit Positive 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FX Government Debt (% of Total, 2005) Source: Moody s Sovereign Outlook - Latin America: Credit profiles stabilizing amid lower growth, moderate external vulnerabilities March 2015 From 90% in 2005 to 48% in 2014 29

Uruguay s Gross Financing Needs are Relatively Small Central Government Gross Financing Needs 2015 (% of GDP) 15,2 9 4,4 4,1 Brazil Mexico Uruguay Colombia Source: Fiscal Monitor IMF, October 2014 and Ministry of Economy and Finance (Gross Financing Needs as Budget Deficit + Maturing Debt) 30

Uruguay Continues Doing Well Compare with its Latam Peers JP Morgan EMBI (in pbs) pbs 415 390 365 340 315 290 265 240 215 190 165 140 06-oct-14 06-nov-14 06-dic-14 06-ene-15 06-feb-15 06-mar-15 06-abr-15 06-may-15 06-jun-15 06-jul-15 06-ago-15 EMBI Uruguay EMBI Colombia EMBI Mexico EMBI Brazil Source: Bloomberg 31

02-ene-12 02-mar-12 02-may-12 02-jul-12 02-sep-12 02-nov-12 02-ene-13 02-mar-13 02-may-13 02-jul-13 02-sep-13 02-nov-13 02-ene-14 02-mar-14 02-may-14 02-jul-14 02-sep-14 02-nov-14 02-ene-15 02-mar-15 02-may-15 CDS: Uruguay has Stayed at Around 150bps but Improved in Relative Value 5 Years Credit Default Swaps (in pbs) pbs 325 300 275 250 225 Standard Deviation of 5 Years CDs Mexico: 17.8 Uruguay: 24.5 Colombia: 24.8 Brazil: 44.7 200 175 150 125 100 75 50 25 0 Uruguay Brazil Colombia Mexico Source: Bloomberg 32

Main Challenges for Debt Management Inertial pressure for re-dollarization of debt Increasing rates as U.S. monetary policy continues to normalize Change in local and external investors preferences towards hard-currency bonds Spillovers from the regional deterioration 33

Financial Strengths Uruguay has a significantly less risky Government debt structure Has built a sizable financial shield to reduce the vulnerabilities that affected the country in the past This provides flexibility when deciding the issuance strategy, optimizing risk and cost Underpins the credit quality of the sovereign 34

Strategic Guidelines for Debt Management Continue reducing the rollover, FX and interest rate risk Maintain a conservative pre-funding policy to cover debt services payments for the following 12 months Obtain an optimal mix of multilaterals and private debt Achieve a more dynamic domestic market Diversify our sources of funding and broaden the investor base 35

Toolbox Broaden the use of derivatives (hedging against FX and interest rate risk) Further develop of the local market (boost liquidity and extend the yield curve in LC) Use of multilateral debt as a growing funding source Reinforcement of contingent credit lines 36