The price gap in the two countries' shops had reached a peak of 180% in September last year and is now at 21.7%.
The price difference between Uruguayan and Argentine retailers was at its lowest level since March 2018, after peaking at 180% in September last year.
According to the results of the latest Border Price Indicator (IPF), prepared by the Salto Campus of the Catholic University, in September the price gap between the cities of Salto and Concordia was 21.7%, which again showed a reduction compared to the September figure (47.4%).
So far in 2024, the performance has been uneven. In January the gap was 97.4%, then it fell to 50.3% in March, rose slightly to 59.2% in May and in July it was 80.1%.
According to the November report - which considers a set of goods and their weighting in household consumption expenditure - the Food and Non-Alcoholic Beverages category again narrowed its gap compared to the previous measurement, standing at 28% compared to the 53% recorded in the September survey.
That category, the most relevant in the measurement of the IPF, found that nine items showed higher average prices in Concordia than in Salto, while almost half of the items showed price differences of less than 50%.
Only four items showed a difference of between 50% and 100% and the maximum price difference reached 128%.
The Alcoholic Beverages and Cigarettes category registered a significant reduction in the gap, going from 76.6% in September to 26.7% in November. Meanwhile, the Clothing and Footwear segment was the one with the greatest reduction within the IPF.
In this case, the prices returned to 2015 values and the gap between both cities was -10%, meaning that all items had lower average prices in Salto than in Concordia.
"From November 2015 to September 2018, Salto had recorded lower prices than Concordia. However, from April 2019, this dynamic changed, reversing the trend and observing a progressive increase in the price difference. This increase culminates in its peak in July 2022, reaching a differential of 85%. Subsequently, the price gap begins to gradually narrow, reaching 5.8% in September 2024 and turning negative at 10% in November 2024," the report detailed.
In the case of the Household Products category, the November IPF also showed a significant reduction, going from 67% registered in September to the current 28%, although some items such as powdered soap, detergent, batteries and electric lamps continued to show high differences, being cheaper in Salto. On the contrary, textiles were more expensive in the Uruguayan city than in Concordia.
Although there is evidence of a significant reduction in the price gap in this division, some items continue to show high differences. Soap powder reached 57%, detergent 31%, batteries 28% and electric lamps 19%. In contrast, textiles (sheets and towels) showed lower prices in Salto compared to Concordia.
On the other hand, and for the first time since the IPF was published, the disparity in fuel prices disappeared.
In the case of a liter of super gasoline, if the reduction of the Specific Internal Tax (IMESI) of 40% is considered, the gap between both cities is -0.6%. Without this tax exemption, the price difference would rise to 65%.
Meanwhile, the price of diesel oil registered a minimal gap of 3% and, on the other hand, tires showed lower prices in Salto than in Concordia, with a negative gap of -30%.
Analyzing the trajectory of price differences for gasoline and gas oil from March 2018 to November 2024, it can be seen that the November record is the lowest.
In the category of meals outside the home, the price gap continued to narrow, reaching 34%. In this segment, the report detailed that the price differences for purchasing meals outside the home in restaurants were 68% for hamburgers and 37% for a family-size pizza, while for soft drinks and mineral water it was 12%.
The IPF division that showed the largest price difference (44%) was Miscellaneous Goods and Services. In this case, price differences were high for some items: 109% for deodorants, 63% for shampoo and 53% for toilet soap. Toothpaste fell to 18% and toilet paper to -8%.
REASONS FOR THE REDUCTION OF THE PRICE GAP BETWEEN URUGUAY AND ARGENTINA
According to the report by the Catholic University, the price gap continues to narrow and this is in line with expectations. After peaking at 180% in September 2023, it dropped to 47% in September 2024 and is now 22%.
This decrease is explained, on the one hand, by the relative increase in prices in Argentina, since the evolution of the exchange rate in that country fell by 10.23% in November 2024 compared to September of this year, and by the variation in the exchange rate in Uruguay, which increased by 3.3% in the same period.
On the other hand, in Argentina, the accumulated inflation until October 2024 was 104.4% for the Pampas region (the reference for the IPF), and was 2.6% in the month of October, while in Uruguay the inflation in November was 0.36%, and 5.14% accumulated so far this year.
"The increase in prices in Argentina expressed in Uruguayan pesos was greater than the increase in prices in Uruguay, making the basket considered in the IPF more expensive," the report concluded.
