MercoPress. South Atlantic News Agency

Uruguayans do their shopping in Brazil to capitalize on surging US dollar

Things are usually less expensive on the Brazilian side but the gap has gone wider after recent devaluations of the real

Uruguayan retailers in cities bordering Brazil have expressed concern after residents increased their tendency to shop abroad in the face of the recent rise in the US dollar. Meanwhile, duty-free shops are looking for strategies to cushion the drop in sales to the Brazilian public, amid fears of a surge in smuggling.

While the US dollar keeps going up in Brazil after the latest package announced by President Luiz Inácio Lula da Silva, Uruguayans went back to their old habit of getting their groceries across the border, where it is usually less expensive, with an expanded gap these days.

Meanwhile, despite this scenario, Brazilian authorities blame the Libertarian policies of Argentine President Javier Milei for the fall in exports to that country. “Last year, Brazil exported to Mercosur countries goods for US$ 23.5 billion, 6.9% of our exports, and imported goods for US$ 17 billion, equivalent to 7% of the total, and recorded a surplus of US$ 6.5 billion. Unfortunately, this year our surplus has decreased by 20% due to the fall in exports to Argentina,” Brazil's Undersecretary for Latin America and the Caribbean Gisele Padovan explained.

In an interview with O Globo, she insisted that the fiscal adjustment promoted by Argentina was “the only reason” for the setback. “It is the only explanation why there is a 20% drop from one year to the next.”

“What has changed this year? The new government in Argentina, which has promoted important changes that have had negative implications for us,” she added while noting that “82% of our exports are manufactured and semi-finished products, which generate employment and income.”