Effect Argentina: Uruguay fears for Brazil for tourism and exports less

Effect Argentina: Uruguay fears for Brazil for tourism and exports less 

Just 24 hours neighboring Argentina have begun to analyze the consequences of the default of the neighbors.

The default in Argentina is threatening to deepen trade tensions in South America, causing a headache for Uruguay and a major economic concern for Brazil, both in an election year.

Exporters of shoes and Brazilian cars are anticipating fewer sales. Uruguayan hoteliers and tourism operators, especially in Punta del Este, prepare for an increasingly poor season, after Argentina failed to reach an agreement with creditors of the holdouts, and thus unlock the payment of debt.

This default will surely undermine the purchasing power of the Argentine, with inflation already exceeds 30%, and would continue its acceleration. Resent those most surely is the automotive category in Brazil, since sent 90% of its vehicle production to Argentina.

Although even before default the automotive market exporter Brazil and suffered a major drop in sales to the Argentine, now exports will be substantially lower, because hardly entrepreneurs want to risk selling to a country of which doubt whether they will pay.

After a long and exhausting legal battle, Argentina lost to hedge funds who rejected debt swaps in 2005 and 2010.

The default will not only press the Argentina currency but accelerating inflation. Raises the financial costs of local businesses and dwindling foreign reserves and meager, which are now below $ 30,000 million.

Across the Andes, the effect does not suffer because Chile just exported to Argentina, although retailers Cencosud and Falabella and have operations in Argentine soil.

As for Brazil, during the month of June he sold to Argentina 7% of its exports by more than $ 7,000 million. The situation of the Argentine could affect a Brazilian economy if weak and close to recession. This would result in decreased production plants in Brazil, and increased layoffs.

An example is Marcopolo, the largest manufacturer of public transportation units in Brazil, which has already cut two-thirds of its production in the last six months.
Since the government of Brazil, Dilma Rousseff message was supporting his counterpart Cristina Fernandez, saying that a few "speculators" were threatening "the stability and well-being" of an entire country.

And for us, a small country with only slightly more than three million people, we have to prepare for a drop in tourism from neighboring shore, which may leave several empty beaches this summer. To this must be added the stricter rules Argentines suffering for some time to purchase foreign exchange and foreign travel.

In Punta del Este, the hotel managers fear a loss of Argentine tourists, accounting for about two thirds of visitors.

"If Argentina is wrong, Punta del Este will be bad," said Fernando Massa, president of the hotel association in the city. "The three-star hospitality down it has serious problems of survival," he added.

http://eldiario.com.uy/2014/08/01/efecto-argentina-uruguay-teme-por-el-turismo-y-brasil-por-menos-exportaciones/