Argentinian Economic Slump Draws Uruguayan Shoppers, While Local Stores Suffer

by Lucas Garcia
Economic disparity

In a recent trip across the border, a group of friends from Fray Bentos, Uruguay, ventured into Gualeguaychu, Argentina, attracted by the considerably cheaper prices. A vast currency disparity between the two South American nations enabled Stella Ferreira and her friend to enjoy low-cost beauty treatments at a hair salon, while their two companions searched for affordable, fashionable clothing.

Argentina is currently wrestling with economic instability, its peso plummeting against the U.S. dollar, and an astronomical annual inflation rate of 115.6% – among the highest globally. On the other hand, Uruguay maintains a more stable economic climate, marked by low inflation and a stronger currency.

This economic divide has resulted in a surge of Uruguayan shoppers in Argentine cities like Gualeguaychú, Concordia, and Colón, providing a vital financial boost to the local struggling businesses.

However, Uruguayan border businesses have been adversely impacted. In the provinces of Salto, Paysandú, Río Negro, and Soriano, municipal officials report that 170 stores shuttered during the first half of the year, with remaining stores struggling to attract customers.

Armed with approximately $100 each, Ferreira and her friends planned a trip to Gualeguaychú, a city in Entre Rios province, which has become a shopping hotspot for bargain-seeking Uruguayans. However, Uruguayan businesses are finding it challenging to compete with the low-cost allure of Argentina.

Susana Guerrero, owner of a cheese and sweets store in Salto, reported significant quiet in her store and was unable to replace an employee she lost. She understands the attraction of Argentine shopping, given the drastic price disparities between the two countries.

Uruguay’s Fray Bentos is littered with special offers in a desperate attempt to lure customers. Alicia Nedor, an employee at a pharmacy, noted a drastic sales slump, identifying it as the sector’s worst crisis in decades.

The trend of cross-border shopping extends beyond Uruguay, drawing shoppers from Chile, Paraguay, and Brazil as well. Uruguayan President Luis Lacalle Pou has acknowledged this “border pandemic”, and despite government efforts, he admits they have not sufficiently tackled the problem.

In response to the issue, the government implemented additional measures, including tax incentives for Uruguayan businesses and import limits on goods from Argentina. However, these controls have been criticised for their ineffective implementation.

The economic disparity is underscored by the Border Price Indicator, developed by the Catholic University of Uruguay, showing it’s 59% cheaper to purchase a basket of goods in Argentina’s Concordia than in Uruguay’s Salto.

Argentina has been grappling with inflation for the past century, and the current crisis has been escalating since 2018, according to María Castiglioni, director of C&T Asesores Económicos. The country’s exclusion from the international debt market after multiple defaults has exacerbated this situation, leading to increased printing of pesos and further devaluation.

On weekends and holidays, long lines of vehicles wait to cross the General San Martín International Bridge between Argentina’s Gualeguaychú and Uruguay’s Fray Bentos.

Over a recent five-day period, more than 100,000 people, primarily Uruguayans, travelled from Uruguay to Argentina. Despite the issue this causes for Uruguayan businesses, Claudio Gatt, a hair salon owner in Argentina, said the influx of Uruguayan customers has been a lifeline.

With signs indicating “dollars accepted” and high volumes of Uruguayans purchasing goods, locals jest that they will soon become Uruguayans themselves. However, Alejandro Ramos, an Argentine teacher, emphasizes that the real issue lies within their own country, stating, “We first have to realize that we are an economic disaster in this country.”

Frequently Asked Questions (FAQs) about Economic disparity

Why are Uruguayans shopping in Argentina?

Due to a significant disparity in the currencies of the two countries, with Argentina’s economy faltering and the peso plummeting against the U.S. dollar, Uruguayans are finding products and services significantly cheaper in Argentina.

How is this cross-border shopping affecting businesses in Uruguay?

This trend is causing a significant downturn for Uruguayan businesses, especially those near the border. Many stores have closed due to the lack of customers, as locals are opting to shop in Argentina for cheaper goods and services.

What measures has the Uruguayan government implemented to address this situation?

The government has implemented measures such as tax breaks for Uruguayan businesses and a 5-kilogram limit on goods Uruguayans can bring back from Argentina. However, business leaders argue these measures are not sufficiently enforced.

What is the cause of Argentina’s economic crisis?

Argentina’s current crisis started in 2018, and has worsened since then. Factors contributing to this crisis include government overspending, problematic monetary policy, and loss of access to the international debt market after multiple defaults on its loans.

What has been the impact of this cross-border shopping on Argentina’s economy?

The influx of shoppers from Uruguay and other neighboring countries has provided a much-needed economic lifeline to struggling Argentine stores and restaurants, particularly in cities like Gualeguaychú, Concordia, and Colón.

More about Economic disparity

You may also like


Carlos_Silva July 15, 2023 - 3:33 pm

This is the reality of living in South America. One country’s crisis is another’s opportunity. Not saying its right, just how it is…

Mario_Lopez July 15, 2023 - 6:11 pm

Can’t believe how bad things have gotten in Argentina. its sad really but u can’t blame the Uruguayans for looking out for their wallets.

Juan_Pedro July 15, 2023 - 6:28 pm

its tough for uruguayan shops, but how do you compete with such low prices? we need more support from the government…

Sofia_Gonzalez July 16, 2023 - 12:17 am

Wow, never thought I’d see the day when Argentinian shops were relying on Uruguayans for business. Times really have changed.

Paula_Mendez July 16, 2023 - 12:21 pm

The situation is tough on both sides of the border, isn’t it? But I’m not sure what the solution could be. The gap in the economies is just too big…


Leave a Comment


BNB – Big Big News is a news portal that offers the latest news from around the world. BNB – Big Big News focuses on providing readers with the most up-to-date information from the U.S. and abroad, covering a wide range of topics, including politics, sports, entertainment, business, health, and more.

Editors' Picks

Latest News

© 2023 BBN – Big Big News