- Oct 9, 2007
Cost of living: Argentina sees prices almost doubling last year
The South American country's inflation rate hit 95% as it faces an ongoing economic crisis.
Soaring prices have largely been attributed to a bout of central bank money-printing . . .
Precisely.Maybe the problem isn't that the cost of living doubled. Maybe the real problem is that the number of pesos in circulation doubled while the amount of goods remained the same, eg. too much money chasing too few goods.
The reason for the hesitation is that larger bills are a palpable and visual indication, a constant and personal reminder, of the failure of incompetent politicians to maintain a reasonable rate of inflation - the putative raison d'être of all central banks. It all being a canard of course as each country's federal treasury departments are perfectly capable of issuing real money, money backed by a commodity such as gold or silver.
Your message suggests that the more luxury goods have doubled, while the poorer do not suffer the inflation of 100%. I think this is entirely wrong.Its simplistic and untrue to say inflation is 95% and the cost of living has doubled.
In reality, there is inflation, there is a change in the exchange rate with dollars and euros which in turn has affected prices of imported goods, and there have been increases in wages and salaries, as well as changes in state subsidies of products and services.
All together, this means some products have, indeed doubled, while others have barely changed, and others have gone up varying percentages.
For the average person, who does not buy apple iphones or japanese whiskey, prices have not gone up anything like double.
For example, I ride the colectivo almost every day.In January of 2022, my average ride was around 29 pesos. Today, its 39 pesos. Not 100%.
And, of course, in real money, a ten peso increase, while certainly percentage wise something to acknowledge, does not affect the lifestyle of most lower class argentines all that much.
Many other things I purchase regularly have gone up well below 100%.
Some things are almost the same as one year ago.
The economic situation in Argentina is complex, and is heavily affected by the multiple billions of US denominated debt, as well as covid related drops in tourist dollars, global increases in dollar priced commodities like oil, and many other circumstances.
As always in Argentina, it much more complicated than the foreign press says it is.
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