Cost of living: Argentina sees prices almost doubling last year

[MilHojas]

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.

www.bbc.com

 

[Agribotics]

Soaring prices have largely been attributed to a bout of central bank money-printing . . .

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.

 

[Quilombo]

Only in Argentina can hitting 95% inflation instead of 100% be viewed as a victory. Alberto te amamos

 

[Greg M]

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.

 

[Greg M]

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.

Precisely.

 

[jblaze5779]

Also folks aren't encouraged to complete purchases through bank transfer like they are now. If you have bigger bills people will start paying for bigger purchases in cash again and circumvent taxes. It's advantageous on several fronts for the gov to not issues larger bills.

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.

 

[Ries]

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.

 

[Rich One]

One shouldn't fool oneself the basic basket of products of daily use by most people has gone up over 100 % on the Average . Pastas, rice, flour , etc. Not included transportation, rentals, electronics, etc.

 

[DK72]

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.

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.

The food basket increased by over 100%, with basic goods such as onions +466%, potatoes +270%, sugar +220%, pasta +140%, eggs 155%, bread +112%. Also milk, flour, coffee above the 100% mark. True that some foods have not increase that much rice +51%, yerba +70% and also some meat cuts are below the annual inflation (having said that, the days where the poor eat meat on a regular basis are gone anyway).

The big positions which are substantially below the annual inflation are private medical care (+88%), rent (65%) and communications (60%). These are not positions the lower classes are less bothered with.

Looking at the inflation numbers for 2022, I would say that the poorer half was much more affected than the rest of the population.

 

[QuilmesSlo]

Too much money printing, but what is the realistic alternative for the government -- politically they cannot stop printing because they cannot stop spending, and cannot collect more taxes, so they have ink & paper.