I wonder about that too... We still have a housing bubble, that accounts for the ridiculous rent - just across the river from Montevideo, in Buenos Aires, rent

I wonder about that too... We still have a housing bubble, that accounts for the ridiculous rent - just across the river from Montevideo, in Buenos Aires, rent is 50% cheaper. The economy is pretty strong at the moment, so the exchange rate for us is favorable, that means cheap imports, but relatively expensive local stuff (especially bought in USD). However, there are stiff trade tariffs, so we can't import cheap foodstuffs, and local ones are pretty expensive - mostly labor went through the roof, and we aren't that much automated yet. The left-wing government imposes taxes on everything - left-wing voters would say that most were left over from other governments, but they were added upon and expanded. An employee is extremely expensive due to all the added social security stuff - close to 100% over the salary the worker receives, and very hard to fire. While the take-home salary is lower, a restaurant employee is probably more expensive in Uruguay than in the U.S. (and more expensive to replace) Same for other stuff, taxi drivers, etc.. are more expensive. Gasoline is more expensive than in Europe, basically twice as much as in the U.S., utilities are not subsidized as much as in other Latin American countries, and very inefficient, so they're a lot more expensive than in the U.S. or Europe. Clothing is taxed absurdly, there's now a 200 dollar allowance for imports, which are basically 3 to 4 times cheaper. We also have some ridiculous bureaucracies in place that impose a huge burden on buying and selling property (housing, cars), creating huge market inefficiencies. The differences with, say, Argentina, are that they're subsidizing heavily - while cratering their economy, since they impose ridiculous tax burdens on exports (Soy, etc..) and have protectionist barriers which are hurting capital expenditures. Brazil is almost as expensive as Uruguay. Other countries such as Chile or Peru are a lot cheaper, because they took much different approaches (with their pros and cons of course), and other countries have an "informal" economy where they don't care that much about nominal taxes and legal system.