Competitiveness accumulates 25 negative months while the dollar falls for the sixth consecutive week

Competitiveness accumulates 25 negative months while the dollar falls for the sixth consecutive week

The competitiveness of the products of Uruguay in the world accumulates 25 months of interannual decline, even when in February, the measurement improved in monthly terms compared to January. He exchange delay and the lack of responses from the government, one of the issues of greatest concern among the export sectors.

February marked a 2.66% increase in external competitiveness of Uruguayan products in dollars but, even so, in the year-on-year comparison it fell once again, with a decline of 2.54%; realizing the depth of the crisis that local exports are going through in this sense. In this way, there are already 25 accumulated negative months, more than two years in a row with loss of competitiveness in international markets.

Likewise, comparing February 2024 with February 2023, the Real Exchange Rate Index (RER) fell 1.41%, also marking the 25th consecutive month of decline. The last time the RER increased was in January 2022, when it improved by 1.64% compared to January 2021.

For its part, the monthly increase in competitiveness from January to February – which represents the fall in the prices of Uruguayan goods in dollars with respect to its main trading partners—responded to an improvement at the regional level, especially in Argentina, due to its own increase in dollar prices. On the other hand, compared to the extra-regional partners, Competitiveness fell by 0.30% monthly, and 4.81% year-on-year.

The dollar has been down for six consecutive weeks

He exchange ratenot surprisingly, is also going through a tough time in Uruguay, in a medium-term context that cannot be understood as positive either, with two years in a row of negative results in the value of the US currency.

Thus, on Friday, although it achieved an increase of 0.48%, it was not enough to return to the range of 38 pesos and dollar closed with a price of 37.89 pesos, according to official data from the Central Bank of Uruguay (BCU). In this way, it completed its sixth consecutive week of decline, the longest negative streak since May 2023; and fell from “end to end” by 1.47%.

In March, meanwhile, it has accumulated a negative result of 2.96%; while in the year it has already fallen by 2.90%.

In this context, the exchange rate delay is once again the center of the economic agenda. “We have a exchange delay that is screwing us, the biggest of the century, I know that if this exchange rate delay could be reduced by half, the dairy farmers would probably receive 2 cents more per liter of milk,” the former president considered in this regard. Jose Mujica.

For his part, the president of the Rice Growers Association (ACA), Alfredo Lago, maintained that “the exchange rate delay is real and has a strong impact on the country’s competitiveness”; while his counterpart from the Rural Association of Uruguay (ARU), Patricio Cortabarría, considered in dialogue with Ámbito that this “continues to be the main eroder of the economic results of companies and a factor that is removing people from the countryside and weakening those on a smaller scale,” he assured. “We understand that it is an issue that must be addressed structural way for the country. There must be a macroeconomic policy designed to be able to solve this problem in the long term,” he stressed.

Source: Ambito

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