Uruguay as a Retirement Destination

The Future of Uruguay as a Retirement Destination

The ink had barely dried on one of my recent postings comparing Coronado Panama rather favorably to Atlantida Uruguay when suddenly everything changed. A reassessment was called for.

Argentina happens to be Uruguay’s most important neighbor in terms of trade and tourism. However, Argentina has once again managed to totally screw up its economy manifested by a major devaluation of its currency. The short to medium term prospects do not look good and this development will create a significant drag on Uruguay as it did at the turn of the century.

Exactly why this has happened in Argentina is another story for another day. Based on recent experience, Argentina will probably take a decade to resolve its problems. Remember that Argentina was once among the ten richest countries in the world.

What happens in Argentina does not stay in Argentina. It would not be very difficult to predict that the recent very robust growth in Uruguay will come to a screeching stop. I would expect that many economic indicators in Uruguay will reverse dramatically over the next several years with an impact of quality of life.

There are also serious economic slowdowns brewing in Brazil and in Chile; Uruguay’s other most important trading neighbors.

The bright side to all of these impacts for a North American “retiree” in Uruguay is that your American (or Canadian) dollar will go a lot further. The price of houses in Uruguay should also decline significantly after a rather rapid run-up since 2011. On the negative side, general unemployment will rise, tourism will decline and inflation may well become an important political issue.

Coronado by comparison

In comparison, Panama and Coronado continue to chug along at mind boggling economic rate (higher than China) with major new residential and commercial projects, starting up every week or so. I am still not sure where all the customers are coming from.

The new Rio Hato airport (20 minutes from Coronado) is finally up and running with several flights having actually arrived. Rio Hato will become a much busier airport by the end of 2014 as most charter flights are being moved out of the main Tocumen Airport in Panama City to allow room for expansion. In anticipation of these charter flights direct to the Pacific Coast, large numbers of resort hotels are breaking ground in the greater Coronado area.

Although Uruguay still has many pluses, some clouds are gathering that are beyond its control. Uruguay unfortunately does not live in an economic vacuum. The lesson learned is that change can happen very quickly and rather unpredictably.

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