The parallel dollar or Dolar blue in Argentina experienced a new sudden increase after the various economic announcements made by the Minister of Economy and presidential candidate for the ruling party, Sergio Massa and in Uruguay alarms go off due to the effect that a new deepening of the price gap with the neighboring country, following the exchange difference.
Uruguay feels the aftershocks every time the Argentine market falters, so the escalation of the Dolar blue does not go unnoticed on this side of the Silver river. Concern had already marked the field after the surprising results of the elections Simultaneous and Mandatory Open Primaries (PASO) that had taken the price of the parallel dollar to a historical maximum of 730 Argentine pesos. At that time—just a month and a half ago—the price gap grew to 199%.
Now, with a new and significant increase in the currency of the Argentine informal exchange market, which reached a new record of 778 pesosthat price gap it deepened to 212%making it increasingly cheaper for Uruguayans to acquire goods and services in Argentina, even despite the high inflation rates in the neighboring country.
In this sense, the Central Bank of Uruguay (BCU) has been monitoring the exchange rate situation on the neighboring shore—along with other macroeconomic indicators that have set off alarm bells on the local scene—for months, when the situation was still far from being as serious as it is today. For example, in April he had already pointed out the fragile financial context of Argentina and was studying the possibility of a contagion effect in the event of a possible exchange rate run —like the one that occurred in 2001 and 2002.
The consequences of the blue trigger
Although a crisis similar to that of 20 years ago was ruled out by the BCU, the truth is that the Argentine situation is not harmless for the Uruguayan economy. And the price gap It is the main enemy of local finances today, mainly due to the diversion of internal consumption that occurs to the other side of the border.
He exodus of Uruguayans toward Argentina It is already a scene that is repeated every weekend and is exacerbated during vacation periods, as happened during the September holidays. Consequently, the collection of the General Tax Directorate (DGI) continues to fall —in August it marked a decline of 3.5% year-on-year, while in 2023 it accumulates a decrease of 2.1%, due to lower income from the VAT and the IRAE, mostly-; and the country’s fiscal balance continues to deteriorate.
The escalation of Dolar blue does little to alleviate this present of tax situation Uruguayan. In fact, quite the opposite: the more the parallel dollar rises, the more price gap deepens and citizens have more incentives to go in search of saving on goods and services that, in the national territory, are significantly more expensive.
Added to this is also the concern about what may happen in the summer season: on the one hand, due to the smaller number of Argentines who visit national destinations —being the main origin of the respective tourism in the country—; and, on the other, by the number of Uruguayans who choose Argentina to vacation over local alternatives—with the consequent impact on the internal tourism.
In this regard, one of the measures that the Ministry of Tourism plans to implement is zero VAT for Uruguayan residents during the summer season, in order to promote local destinations and allow operators to offer more competitive prices. However, it will be necessary to analyze the impact that this initiative could have, in turn, at the fiscal level in an already unstable context.
Source: Ambito
