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Montevideo, October 6th 2022 - 16:30 UTC

 

 

Uruguay's economy shows drop in sales

Thursday, August 18th 2022 - 09:19 UTC
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Many Uruguayans would rather do their shopping in Argentina thanks to a favorable exchange rate Many Uruguayans would rather do their shopping in Argentina thanks to a favorable exchange rate

Uruguay's domestic trade has recorded a 5.3% drop in sales of products and services during the second quarter of 2022, the Chamber of Commerce and Services reported Wednesday.

The measurement is a comparison with the same period of 2021 when sales had already decreased 1.3% from the previous year.

According to the Activity Report for the second quarter published by the Chamber of Commerce and Services, the economy contracted 5.3% between April and June.

The report also highlighted that “at the company level, a generalized drop in sales is also observed, where only 29% of the companies recorded an increase in the second quarter of the year”.

Unlike in previous quarters and according to the Chamber's survey, the fall made almost no distinctions among items. Only 27% of them recorded an increase in sales in the interannual comparison, after reaching 100% in the fourth quarter of 2021 and dropping to 53% in the first quarter of this year. This means that, of the 15 items surveyed, while 4 items recorded an increase in their sales volumes, the remaining 11 went down.

Services also made a U-turn from their growing trend and fell 5.4%. Hotels also fell 9.8%, while Restaurants and Coffee Shops experienced a 5.6% drop after two successive quarters with increases above 10%. On the other hand, Travel Agencies remained in a stagnant area for two consecutive quarters, far from the growth levels recorded at the end of last year as a result of the opening of borders prior to the summer and the low figures in the interannual comparison.

The Chamber also said that ”in the Commerce sector, there is also a scenario of lower activity in most of the items analyzed, reaching, however, a slight increase of 0.7% in real sales as a whole. The significant decreases of close to -10% in the following items stand out: Toys (-10.7%), Personal care (-10.9%) and Vehicles, automotive parts, fuel (-9.5%), in the last two cases sharpening the declines already observed at the beginning of the year 2022. After several quarters of growth and having already slowed down the pace of growth in its sales volumes at the beginning of the year, Computers (-3.4%) fell for the first time since January-March 2021. Likewise, only two items showed relevant year-on-year real sales gains in this period: Apparel (11.5%) maintaining its sustained growth since the beginning of 2021, and Optical (5.8%) reversing somewhat the decline noticed in the first three months of the year,“ the report pointed out.

There was also a 5.3% drop in sales at Supermarkets, following a slight growth in the two previous quarters.

Meanwhile, retailers in the Uruguayan city of Salto have denounced they cannot compete with prices across the border in the Argentine city of Concordia, due to exchange rate issues.

The Economic Observatory of the Catholic University of Salto published the Border Price Indicator showing the gap with Argentine prices at its peak in the past seven years. Prices are 174% higher on the Uruguayan side of the border.

The measurement compares the prices of 60 items and the ”blue” (unofficial) dollar exchange rate is taken as a reference. Of those items, 30 belong to the food and non-alcoholic beverages category (bread, rice, noodles, flour, meat, oil, eggs, sugar, tomato pulp, milk, soft drinks, yerba mate, etc.) and all are more expensive in Salto than in Concordia. The total difference between prices is 201%.

Wine, beer and cigarettes also show differences above 100%, while in whiskey the price difference is 54.2%. Gasoline is 186% more expensive in Salto than in Concordia and 168% in the case of diesel.

Categories: Economy, Uruguay.

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