Is Uruguay Expensive?
Not the best place for broke dicks
“Fuck, I just spent $80” I said as I read my first dinner bill in Uruguay. My girlfriend and I had just crushed multiple steaks, some sides, and a nice bottle of red wine.
After spending several months in Buenos Aires, we had become spoiled as fuck. Living a hedonistic life of pleasure where the same meal would have run us $30. Now we were back to the real world.
For the first couple of weeks in Uruguay, I felt a similar “fuck” reaction every time I paid for something at a grocery store, coffee shop, or restaurant.
Shit was so expensive compared to what I was accustomed to after spending years all over Latin America.
When I say expensive I mean 3x more than a country like Argentina (before 2024), Peru, or Colombia. And equally as expensive as some US, Canadian, Australian and European cities.
After spending 7 months here over the past couple of years, I can honestly say I’m used to it now. When I come to Uruguay, I know what’s up. There aren’t any surprises.
Paying higher prices isn’t fun but I obviously like the country, otherwise I wouldn’t pay the high cost to spend time here.
The short answer to why Uruguay is expensive is because of the lifestyle, safety, high import tax, high sales tax, strong currency, and price gouging.
The Uruguayan Lifestyle
To start with, Uruguayans have some good things going for them.
Access to good public schools and affordable healthcare
Free university education
Large middle class. Not many people are living in poverty or in the streets.
Cities and towns are nice and organized. In many places you feel like you could be in Europe.
There is good quality food. Excellent beef, lamb, red wine, and olive oil that are all locally produced.
Every city and town has access to high-speed internet
Roads and highways are well maintained
It is a very safe country. I’ve never felt any danger here. For the most part, you can walk around completely relaxed, without looking over your shoulder.
I haven’t been to a place in this country that I would consider a “3rd world shithole”, for lack of a better word.
There are some sketchy places in Montevideo. And some pueblos that are on the poor side within the country. But in comparison to the US and other Latin American countries, the danger feels minimal and it’s generally easy to avoid.
Don’t expect to pay 3rd world prices for a country with this type of safety and lifestyle.
Taxes in Uruguay
There’s no way around it. Taxes are high in Uruguay.
Locals deal with very high personal income taxes.
And because Uruguay is a small country that does not produce many products, most things need to be imported.
This adds a layer of import tax on most products before they even get to the customer, significantly raising the base price.
While import tax matters a lot, a foreigner visiting the country will most directly feel the effect of VAT (Value-added tax).
VAT is a 22% sales tax on all goods and services in the country.
Anything you pay for at the grocery store, pharmacy, or any other place costs 22% more. No matter how clever your spending is, you get hit with 22% repeatedly.
VAT adds a significant cost to every purchase for both locals and foreigners.
One way to deal with this is to use your foreign credit card at restaurants. This will automatically remove about 18% of the VAT from a purchase, which definitely helps.
This type of promotion tends to run from December-April, more or less. I think it’s more like 9% the rest of the year.
Unfortunately, it mainly applies to restaurants and nothing else. So you still get your ass kicked by VAT at the grocery store.
You can tell if the promotion worked if you see Descuento Ley 17.934 or something similar on your receipt after you pay. In this case, my bill with 10% tip was about $27 USD. With the discount applied, I got about $4.50 USD back.
The currency is strong
The Uruguayan peso is strong.
It’s not worth as much as a dollar or euro, but it’s consistent and is quite stable. The past couple of years it’s actually been gaining on the US dollar.
The reason you often get good deals in Latin America is because of the instability of the currency.
Prior to 2024, US Dollars were so powerful in Argentina that you were paying about 3x less for things like food, alcohol, coffee, and various forms of entertainment.
That kind of thing never happens in Uruguay. Things function too well here for opportunities like that to arise.
So there are no discounts based on currency.
Beach city price gouging
If you are staying in a city like Punta del Este or José Ignacio, prices can be even higher.
These places attract a lot of rich Uruguayans and foreigners.
Because of this, restaurants can be 20% more expensive than in Montevideo.
The grocery store also charges something like 20% more for groceries.
To use an example, the same product might cost $12 at Fresh Market in Montevideo but will cost $15 at Fresh Market in Punta del Este.
This isn’t the rule for every restaurant or grocery product, but you get the idea.
Pueblos aren’t cheaper
In almost any other country I’ve been to, going to a small town costs significantly less.
The prices are low in Argentinian, Peruvian, Mexican, and Colombian pueblos.
In Uruguayan pueblos, the deals are not that good. Restaurants cost very similar to what I pay in the capital of Montevideo. Groceries are about the same cost.
It’s very interesting to me that I often get better deals in the capital. I can’t think of another country where that happens.
Airbnbs and hotels might be slightly cheaper, but nothing that makes me feel like I’m really getting a great deal.
I’m sure there are some things I’m missing but I haven’t seen the 50% discount I see when I go to small towns in other countries.
Uruguayan towns are cool and I enjoy them. But I don’t find them cheap at all.
Like I said, if you’re coming from another country in Latin America, expect to pay 2x-3x more than what you have been paying, depending on the country you are coming from.
I’m originally from Los Angeles where the prices are insane, so Uruguay is still reasonable in cost for comparison. It’s a similar case for other large US and European cities.
Smaller US and European cities will be about the same cost.
I work a lot while I travel and make pretty decent money, so I’m able to afford the price of Uruguay.
If you’re on a tight budget, you may want to take a shorter trip or come another time.
This country is unique and different from the rest of Latin America. It’s definitely worth checking out.
Just be prepared for some shit to be expensive as fuck.