The exchange difference with Argentina continues to hit the Uruguayan economy, especially the trade that is affected by citizens who cross the border to purchase much cheaper products; However, the confidence of the consumers continues to grow, which represents a positive sign for Uruguay.
Commercial activity contracted 2.8% during the third quarter throughout the country, a decline driven by the lower growth scenario that is deepening throughout the country, according to the Chamber of Commerce and Services of Uruguay (Ccsuy)which also revealed the drop in business expectations.
According to the survey carried out by the Ccsuy, the fall in trading companies Montevideo It was 2.6%, while in the interior it reached 1.6%. On the other hand, the declines in service firms reached 6.3% in the capital and 1.7% in the rest of the country, which makes worry grow in the sector.
At the level of sales By items, 13 out of 20 showed declines again, in a similar way to what was observed in previous quarters. Supermarkets and Hotels went from positive to negative variations, falling 3.9% and 1.1%, respectively, while those that went from negative to positive terrain were Construction materials, hardware stores, paint stores (1%), Toys stores (0. 8%) and Security Services (3.5%).
In turn, the report indicated that, with the exception of medium-sized companies, all company sizes had a drop in profits. sales. Large firms fell 3.9%, while micro and small firms fell 4.1 and 3%, respectively.
Waiting for Milei’s measures
Next Sunday the Argentine president-elect, Javier Milei, will assume his position as president of the neighboring country, replacing Alberto Fernandez. With this, Uruguayan businessmen hope that Milei will carry out a devaluation in the neighboring country that will allow relative prices in relation to Uruguay improve.
However, profitability expectations for this year were reduced again, going from 56 to 53 points, reflecting the recessionary effects of shocks such as the drought and the diversion of consumption towards Argentina.
At the same time, the profitability expectations for next year of the companies surveyed by the Ccsuy fell significantly, varying from 73 to 66 points, one of the lowest records of the indicator in its history, so a deterioration is expected. marked for 2024. Meanwhile, an improvement in consumption is expected from the second half of 2024 and the beginning of 2025, not before.
A light of hope
Although the upcoming scenario in terms of consumption, and specifically in commerce, looks quite gray, the confidence of Uruguayan consumers continues to grow. Something that would impact positively in consumption due to an improvement in the perception of the economic situation.
According to him Consumer Confidence Index (CCI), prepared by the Catholic University of Uruguay (UCU) and the consultant Equipment, Consumers are “moderately optimistic.”
This was located at 54.8 points in October, rising 3.4 points in relation to the August measurement – when it measured 51.4 points, also after an improvement of more than 3 points – and 5.4 points in interannual terms.
With these figures, in addition, the ICC once again accumulates two months of good results, after the June survey evidenced a deterioration in confidence, which fell to levels of “moderate pessimism.”
Source: Ambito
