The exchange difference continues to affect the Uruguayan companies, not only on the coast, but at the national level; meanwhile, the expectations Regarding next year, they are not very hopeful and those involved demand long-term actions.
The latest survey of the Chamber of Commerce and Services revealed that 58% of companies perceive that the relative price situation is unfavorable for Uruguay about Argentina and that it is affecting the development of their business, while 35% of companies consider that the negative impact on their company is “important”. Meanwhile, 23% establish that the negative impact on their company is “unimportant.”
Among those companies that recognized that they were receiving a negative impact due to the situation with Argentina and the exchange rate relationship, 63% expressed that the main channel of impact is lower sales levels due to consumption shifts and lower domestic tourism.
In dialogue with Ambitthe economic advisor of the Chamber of Commerce and Services, Ana Laura Fernandez, He commented that “the problem started on the coast since the companies located there are the most affected, although currently this affects all companies and this impact has to do with the shift in consumption.”
“According to estimates that we made from the chamber, almost 50% of the growth in private consumption that we are going to have in 2023 is occurring in Argentina,” explained Fernández, who assured that there is a shift in consumption towards the neighboring country, not not only goods, but also services, even beyond the traditional services associated with tourism.
The problem of smuggling
The exchange gap It mobilizes the consumption of Uruguayans to Argentina due to a large price differential. “Today the exchange rate difference or the price differential is of such magnitude that it creates an incentive for families to go and consume those services at Argentina”, He asserted and added that “smuggling is really hitting companies across the country in different sectors such as personal care and food.”
Fernández assured that “there is a lot of merchandise that enters today and that is being marketed not only in the coastal area but throughout the country such as in fairs, street sales and electronic commerce.” Therefore, together with customs they are in direct contact identifying situations and reporting cases.
Forecasts for summer
The results of the survey also establish that, with regard to the 2023-2024 tourist season, 48% of companies expect a situation similar to what has already been experienced this year to continue.
Regarding the measures taken by the government seeking to reduce the impact on the commercial sector, economist Fernández expressed that “what it is about is mitigating reality, clearly for local companies” and that the measures are insufficient. “There is a fiscal cost and at the end of the day, it is a political decision from the authorities,” he added.
In this sense, Fernández reflected that it is necessary to seek some measures so that companies continue to survive and generate jobs. Meanwhile, he assured that they continue to work with customs to intensify border controls. “There are things to do, but with an impact and a look forward, not focused on the current situation with Argentina”, the economist remarked.
Regarding this, the economist regretted that it is a situation that continues over time. “The most relevant thing is the duration of time that this is taking. That makes it increasingly complex for companies to sustain such low sales levels in some sectors in particular,” identified Fernández, who assured that this is perhaps the most worrying thing about the scenario.
“We do not expect very auspicious news from Argentina, beyond all the changes that are there today being processed, but it is a reality that is not solved overnight. In any case, 2024 is going to continue to be complex,” she concluded.
Source: Ambito
