The price gap between Uruguay and Argentina has been experiencing a new rise after having been significantly reduced with the devaluation implemented by the government of Javier Milei in the neighboring country, and the effects are already beginning to be felt in the coastal shopswhere concern and uncertainty about what may happen is widespread, with the memory of the crisis in the sector still very recent.
“2024 had started quite well, the price gap with the rest had narrowed considerably. Argentina, But now slowly, over time, the blue dollar has risen and that has led to the exchange rate gap stretching again,” said the president of the Shopping Center and Industrial of Salto, Guillermo Luzardo, in dialogue with Radio Monte Carlo; in reference to the data collected by the Border Price Index (BPI) of the Salto Economic Observatory of the Catholic University of Uruguay (UCU)which recorded an increase in the gap up to 80%.
In this regard, he said that “they are already being detected tails weekends on international bridges, of consumers” who decide not only to buy products from the other side of the border, but also to acquire services in the neighboring country.
Although the situation is not yet critical – considering that the worst moment for the border departments was when the price gap widened to 180% in September of last year – “it is worrying because it generates a lot of uncertainty,” said Luzardo. “We also do not know how the market will behave.” blue dollar nor the Argentine economy,” he added.
Regarding the impact on employment levels, the president of the Salto Commercial and Industrial Center He said the widening gap also had an impact on unemployment on the coast. “We still do not have the latest data from the INE, But I think that will also increase,” he said.
Meeting along the coast
Meanwhile, on Monday in Executive Tower The Border Policy Commission will meet, one of the achievements of the political, commercial and industrial sectors during the crisis that the border departments experienced in much of 2023. It is made up of members of the Executive power, of the coastal departmental governments and the shopping centers in the area.
“The idea is to exchange ideas to dictate a law that establishes that when the exchange rate difference exceeds a certain percentage, some measures are activated to help businesses survive and prevent the loss of labor, in order to withstand this crisis,” Luzardo explained.
The price gap is increasing
The price gap between Uruguay and Argentina increased again for the second consecutive measurement, and reached a difference of 80% in July between one side and the other of the River of the Silver. If we look at the May figures, the country’s prices rose by 21% in a scenario in which the lower consumption deviation is beginning to be positively felt in the local economy.
He IPF Prepared bi-monthly by the Salto Economic Observatory, which was accessed Scope, The report recorded a sharp rise in the price gap between the two Rioplatense countries, the second since Milei became the Argentine president. According to the report, purchasing the basket considered for comparison is 44% cheaper in Concordia (Entre Rios), in connection with Leap. In contrast, and from the perspective of Entre Ríos, the indicator showed that the Uruguayan border city is 80% more expensive than its Argentine neighbor.
One of the main reasons for this deepening of the price gap is the increase in the parallel dollar or blue dollar in Argentina, which remained on a relative plateau until early May, and in July experienced a significant rise that in turn widened the gap with the official dollar. On the other hand, the exchange rate in Uruguay rose 4.26% from May to July. Inflation, meanwhile, rose faster in the neighboring country than in the local economy.
Source: Ambito
