Cost of living: Argentina sees prices almost doubling last year

[Rich One]

For those interested, have you checked the price of rental apartments in the US as compared to Argentina? The rent on just an efficiency in the states would allow you a luxury rental here!

As a reference check the data in Numbeo Report comparison between LA and BA. Figures for BA are aprox....


"You would need around 7,020.7$ in Los Angeles, CA to maintain the same standard of life that you can have with 1,900.0$ in Buenos Aires (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax). You can change the amount in this calculation

Cost of Living Comparison Between Buenos Aires, Argentina And Los Angeles, CA, United States

www.numbeo.com

 

[Rich One]

As a reference check the data in Numbeo Report comparison between LA and BA. Figures for BA are aprox....


"You would need around 7,020.7$ in Los Angeles, CA to maintain the same standard of life that you can have with 1,900.0$ in Buenos Aires (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax). You can change the amount in this calculation

Cost of Living Comparison Between Buenos Aires, Argentina And Los Angeles, CA, United States

www.numbeo.com

A few items mentioned are cheaper in LA. ?

1. VW Golf
2. Mobile Tariff 1 Min.
3. Levis 501
4. Nike running shoes, Mid range
5. Mortgage Interest Rates..!

 

[SanTelmoForever]

A few items mentioned are cheaper in LA. ?

1. VW Golf
2. Mobile Tariff 1 Min.
3. Levis 501
4. Nike running shoes, Mid range
5. Mortgage Interest Rates..!

Very interesting, Rich One.

Do they consider income tax? Is that $7020 after-tax income?

 

[SanTelmoForever]

Very interesting, Rich One.

Do they consider income tax? Is that $7020 after-tax income?

Never mind. I went and checked the page, but then I re-read the post above and the answer was already there. It is after-tax income. That makes Buenos Aires even cheaper in comparison. To net $7000/month in LA, you must be paying at least $1000/month in income taxes, right? (If you're single, just the federal tax is more than that, according to the Motley Fool.)

 

[Pat Murphy]

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.

It is not simplistic, it is factual based upon the index selected to be the consistent measure of (a.) the absolute change of prices and (b.) the rate of change of prices for items selected to be included in the index. The metrics are quite easily determined on a YOY or MOM basis. Cherry picking items to demonstrate anecdotal inflation, or in your case, a presumed lack thereof, is counterproductive from the macro standpoint that organizations such as INDEC or IMF must consider in order to gauge national economic health and more importantly to lend money. Argentina's inflation is almost solely due to an increase in the supply of money, considerably more so than due to any supply chain issues. As always, monetary policy is political policy.

 

[Traveler]

Just caught an earshot today that supermarkets (not sure which ones) will DOUBLE their employees pay. That always works. Hardly.

 

[Ries]

It is not simplistic, it is factual based upon the index selected to be the consistent measure of (a.) the absolute change of prices and (b.) the rate of change of prices for items selected to be included in the index. The metrics are quite easily determined on a YOY or MOM basis. Cherry picking items to demonstrate anecdotal inflation, or in your case, a presumed lack thereof, is counterproductive from the macro standpoint that organizations such as INDEC or IMF must consider in order to gauge national economic health and more importantly to lend money. Argentina's inflation is almost solely due to an increase in the supply of money, considerably more so than due to any supply chain issues. As always, monetary policy is political policy.

please link to the studies which show 93% inflation YOY, and what, exactly, they are including in the basket for Argentina.

I would assume they would leave out health care, which is free at public hospitals,
utilities, which are both subsidized and have price controls, (the government of Argentina usually spends about 25% of its total expenditures on fossil fuel subsidies)
transportation (ie, colectivos, subte, and trains, which, again, are both subsidized and have price controls)
housing, which is, again, regulated, price controlled, subsidized, and, in the case of the 3 million or so people who squat in villas and the conurbano, basically free from rent, as long as you build it yourself.
(although I met an artist a couple of years ago who rented an apartment in the villa between San Telmo and Puerto Madero, because it was cheap and convenient- and for them, perfectly safe. So some places in villas are definitely rented. Be curious to know if those rents track inflation)

Most first world nations jigger the contents of their baskets for political reasons- for instance the USA tends to exclude changes in food and energy prices in their inflation numbers. This is exactly what you called it- cherry picking. Everybody does it. The really interesting part is what they cherry pick to get what rate of inflation. US consumer prices rose between 1% and 30%, depending on the category of good or service. Coming up with a national inflation rate will vary widely, depending on weighting, which is, I believe, complicated and not transparent at all.

I would be very interested to hear which items are used to calculate Argentina supposed 100% numbers.

 

[Traveler]

please link to the studies which show 93% inflation YOY, and what, exactly, they are including in the basket for Argentina.

I would assume they would leave out health care, which is free at public hospitals,
utilities, which are both subsidized and have price controls, (the government of Argentina usually spends about 25% of its total expenditures on fossil fuel subsidies)
transportation (ie, colectivos, subte, and trains, which, again, are both subsidized and have price controls)
housing, which is, again, regulated, price controlled, subsidized, and, in the case of the 3 million or so people who squat in villas and the conurbano, basically free from rent, as long as you build it yourself.
(although I met an artist a couple of years ago who rented an apartment in the villa between San Telmo and Puerto Madero, because it was cheap and convenient- and for them, perfectly safe. So some places in villas are definitely rented. Be curious to know if those rents track inflation)

Most first world nations jigger the contents of their baskets for political reasons- for instance the USA tends to exclude changes in food and energy prices in their inflation numbers. This is exactly what you called it- cherry picking. Everybody does it. The really interesting part is what they cherry pick to get what rate of inflation. US consumer prices rose between 1% and 30%, depending on the category of good or service. Coming up with a national inflation rate will vary widely, depending on weighting, which is, I believe, complicated and not transparent at all.

I would be very interested to hear which items are used to calculate Argentina supposed 100% numbers.

I base my estimated on inflation with "the wine index". My favorite inexpensive yet good wine, Nampe has gone from 230 pesos to 500 pesos in the past year. Meat prices have risen to new heights yet by American standards are still cheap. Who needs an index to see the obvious? Then add all the bonuses given to (it seems) most everyone and you don't need to be a financial expert to understand why prices increase. Here the students get paid $5000 pesos per month for doing.....nothing except going to school.

 

[steveinbsas]

I would be very interested to hear which items are used to calculate Argentina supposed 100% numbers.

So would I.

My internet service was $1750 for the month of January 2023.

My internet service will be $3.800 for the month of Februray 2023.

Just one example of more than a 100% increase from one month to the next.

 

[DK72]

please link to the studies which show 93% inflation YOY, and what, exactly, they are including in the basket for Argentina.

I would assume they would leave out health care, which is free at public hospitals,
utilities, which are both subsidized and have price controls, (the government of Argentina usually spends about 25% of its total expenditures on fossil fuel subsidies)
transportation (ie, colectivos, subte, and trains, which, again, are both subsidized and have price controls)
housing, which is, again, regulated, price controlled, subsidized, and, in the case of the 3 million or so people who squat in villas and the conurbano, basically free from rent, as long as you build it yourself.
(although I met an artist a couple of years ago who rented an apartment in the villa between San Telmo and Puerto Madero, because it was cheap and convenient- and for them, perfectly safe. So some places in villas are definitely rented. Be curious to know if those rents track inflation)

Most first world nations jigger the contents of their baskets for political reasons- for instance the USA tends to exclude changes in food and energy prices in their inflation numbers. This is exactly what you called it- cherry picking. Everybody does it. The really interesting part is what they cherry pick to get what rate of inflation. US consumer prices rose between 1% and 30%, depending on the category of good or service. Coming up with a national inflation rate will vary widely, depending on weighting, which is, I believe, complicated and not transparent at all.

I would be very interested to hear which items are used to calculate Argentina supposed 100% numbers.

Here is the data of the annual inflation. It is not a US right wing think tank, but coming straight from the Argentinian government (INDEC):



As you can see, public transport and healthcare are also included. I agree that for some people it does not affect them, but statistically it is correct to include them (as for many people these are a big part of the monthly budget).

Even if you take the José Villero living in a slum in the Conurbano, you can see in the table above that - even if sends his many kids to public school and hospital - that the inflation is hitting him at least as much as the rest of population: Alimentos + 95%, Ropa + 120%.

I am not from the US, but I am rather that your government includes food and energy prices. You can always debate about the weight of the goods/service basket in an inflation index, but as long as it is consistent it doesn't really matter that much. The variation are rather small.

If someone does "jigger the content" of their baskets, I wouldn't look that much at first world nations. Just look a couple of years back in Argentina under the CFK rule where they grossly (again INDEC) misstated the inflation numbers. "INDEC says consumer prices rose 15 percent in the 12 months through June while private economists estimate inflation at 27.9 percent, one of the highest rates in the world. Critics, including some of the agency’s own statisticians, say INDEC is masking Argentina’s top economic problem for political reasons." (Reuters) Nowadays (since Macri, but also with Alberto), the numbers of the INDEC are more or less undisputed (by government allied politicians, as well as opposition; at least I haven't heard otherwise).