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4 keys to understanding the phenomenon

4 keys to understanding the phenomenon

The phenomenon is not new, but it has worsened in recent weeks with the Dolar blue reaching historical prices in the Argentina: Thousands of Uruguayans regularly cross the border to access considerably cheaper products. Last weekend, more than 80,000 people “crossed the pond”.

A inflation still high by Uruguayan levels (7.33% annual in March) and internal trade tied to the value of the dollar make the exchange difference with Argentina attractive, where, for example, supermarket goods are up to 56% cheaper than in the local market .

scope.com He reviewed the main causes of a phenomenon that, far from weakening, already marks the reality for the departments of the Uruguayan coast and begins to affect commercial and labor activity at the national level.

The high cost of living in Uruguay

Uruguay has a cost of living that is 93.3% higher than that of Argentina, according to the latest report from Numbeo, a site specialized in comparing the costs of living in different cities and countries around the world. A typical family has monthly expenses of 2,923.30 dollars (not counting rent), that is, 113,250.10 Uruguayan pesos. While in the neighboring country the estimated costs of living are $1,530.60 without rent.

Dollar rates and the exchange difference

For Uruguayans, buying in Argentina is 56% cheaper, according to the latest report on Indicators of Border Prices (IPF) of the Economic Observatory of the Catholic University of Uruguay (UCU), corresponding to March.

The largest price gap between Leap and Concord it occurred in the Miscellaneous Assets category, where the Uruguayan city was 212% higher than the Argentine one. Acquiring a deodorant on the Uruguayan side of the border can cost up to 329% more than doing it in an Argentine store. The hygiene basket is the one with the greatest difference: in the case of shampoo there is a gap of 265%; for toothpaste, 194%; for toilet soap, 188%; and for toilet paper, 115%.

Live in Argentina and work in Uruguay

So far this year, More than 2,000 Uruguayans signed rental contracts in the Argentine cities of Colón and Concordia. According to specialized sources, these are people who carry out their working lives in Uruguay and cross the border daily.

Why is that? Rental prices in the country are high. Although the increases remain below inflation, they represent a considerable expense in relation to the income level of Uruguayans.

According to the Numbeo comparison, in March renting in Uruguay was 127% more expensive than doing it in Argentina. Meanwhile, Montevideo has the most expensive square meter in all of Latin America: $3,146, according to the Finance Research Center (CIF) of the Di Tella University Business School together with zoneprop.

A blow to the economy of the Uruguayan coast

Only in Leap170 businesses have closed in recent months, according to the mayor. Andres Lima, who linked it directly to the exchange difference with Argentina and purchases on the other side of the border. “There will be more shops closed, more unemployment and more Uruguayans will go to Between rivers“, held.

For months, unemployment in the border area is higher than the national median, not seen to be modified. According to the latest data from the National Statistics Institute (INE), Unemployment in Salto exceeded 14%, something that has no recent record. Unemployment also rose in Artigas and paysandu (12.7% and 10.5%, respectively), while in Black river it gave way, but due to a drop in the activity rate. It should be remembered that the national average unemployment rate in February was 8.1%.

Source: Ambito

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