Cost of living: Argentina sees prices almost doubling last year

[Rich One]

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.

Right on..! Clever merchants realized that the masses were consuming less meat, chicken and pork and expensive food prods. To compensate they Raised the prices of the basic food needs of the poor, .
(onions +466%, potatoes +270%, sugar +220%, pasta +140%, eggs 155%, bread +112%. Also milk, flour, coffee above the 100% mark)

 

[Quilombo]

I mean, it's one example, but The 1.75L of Coca Cola Zero I buy at Carrefour a couple times a week was $82 when I first came back to Argentina 2 years ago and it's $388 now, a 373% increase in 2 years.

Also let's keep in mind that inflation hits the people that can least afford it the hardest. While the subte may not have doubled, I'd argue most things I consume have, if not more, while others even more so.

Also the user base of this form is generally shielded from the worst aspects of Argentine inflation. While the dollar hasn't gone up (blue or official) 373% in 2 years, it has gone up at least, while Argentine salaries have decreased. Most of us are either retired and receiving a pension or passive income in dollars, are remote workers earning in dollars, or working here locally and indexing our salaries to the price of dollars, so inflation is probably closer to 20% or 30% for us, vs. 100%+ for everyone else.

 

[TWB103]

Some posters wear rose tinted glasses...Inflation -universally- affects the poorest the most and whilst the exact causes might be hard to identify or proportion the results are not.

 

[Rich One]

I mean, it's one example, but The 1.75L of Coca Cola Zero I buy at Carrefour a couple times a week was $82 when I first came back to Argentina 2 years ago and it's $388 now, a 373% increase in 2 years.

Also let's keep in mind that inflation hits the people that can least afford it the hardest. While the subte may not have doubled, I'd argue most things I consume have, if not more, while others even more so.

Also the user base of this form is generally shielded from the worst aspects of Argentine inflation. While the dollar hasn't gone up (blue or official) 373% in 2 years, it has gone up at least, while Argentine salaries have decreased. Most of us are either retired and receiving a pension or passive income in dollars, are remote workers earning in dollars, or working here locally and indexing our salaries to the price of dollars, so inflation is probably closer to 20% or 30% for us, vs. 100%+ for everyone else.

You are Correct Expats on dollar income have lost 20% buying power in 2022.
However Unionized workers like, bankers, truckers, Porteros, oil, gastronomic, empleados de comercio, etc have had salary increases above the inflation of 95% . However workers "en negro" and not unionized Pyme workers may have had lower or no salary increase..! They are the "weak and the poor".

 

[antipodean]

You are Correct Expats on dollar income have lost 20% buying power in 2022.
However Unionized workers like, bankers, truckers, Porteros, oil, gastronomic, empleados de comercio, etc have had salary increases above the inflation of 95% . However workers "en negro" and not unionized Pyme workers may have had lower or no salary increase..! They are the "weak and the poor".

Most paritaria (salary adjustments) for most unions in 2022 were actually below inflation - meaning real wages are lower than before.
The average was 90% in 2022 while the inflation for that year was 95%. Many unions only agreed to 80%ish.

For that reason there are so many Argentine workers (en-Blanco, unionized) constantly complaining about not being able to make it to the end of the month without either cutting their expenses, receiving handouts or having a side-hustle. And all that while still having many of their necessities subsidized by the state (transport, energy, basic food items). All the while many business owners and union bosses sit pretty driving nice new SUVs...

Anyone that tries to paint a picture of a workers paradise in today's Argentina thanks to its unions is wearing rose-tinted glasses.

 

[DK72]

Most paritaria (salary adjustments) for most unions in 2022 were actually below inflation - meaning real wages are lower than before.
The average was 90% in 2022 while the inflation for that year was 95%. Many unions only agreed to 80%ish.

For that reason there are so many Argentine workers (en-Blanco, unionized) constantly complaining about not being able to make it to the end of the month without either cutting their expenses, receiving handouts or having a side-hustle. And all that while still having many of their necessities subsidized by the state (transport, energy, basic food items). All the while many business owners and union bosses sit pretty driving nice new SUVs...

Anyone that tries to paint a picture of a workers paradise in today's Argentina thanks to its unions is wearing rose-tinted glasses.

I might be wrong here. But even if your salary by the end of 2022 is in line with the inflation, you will lose quite a bit of money.

Example: As per end of 2021 your salary is 100k, inflation is 100%, your salary by the end of 2022 is 200k. The point is: the salary increases are not done on a monthly basis, aren't they? So let's assume the increase happens at each quarter. Your salary in Jan, Feb, Mar 2022 is still 100k. But let's say in March 2022, you will have lost already some 15-25% purchase power compared to the beginning of the year. Then in April you will get the catch up of 25% and the game starts again.

 

[antipodean]

I might be wrong here. But even if your salary by the end of 2022 is in line with the inflation, you will lose quite a bit of money.

Example: As per end of 2021 your salary is 100k, inflation is 100%, your salary by the end of 2022 is 200k. The point is: the salary increases are not done on a monthly basis, aren't they? So let's assume the increase happens at each quarter. Your salary in Jan, Feb, Mar 2022 is still 100k. But let's say in March 2022, you will have lost already some 15-25% purchase power compared to the beginning of the year. Then in April you will get the catch up of 25% and the game starts again.

Here it is usually done "tramos" or parts, and no they are not monthly nor do they follow the same schedule every year. Last year most unions agreed to 2 tramos but by mid-year it was apparent that that wasn't going to work so they agreed to additional adjustments for the last months of the year, some unions even agreed to defer adjustments to 2023(!) - meaning, as you point out, the inflation overtook wages earlier on and the adjustments the workers received for payments moving forward, in many but not all cases, certainly didn't make up for what they lost while waiting for their next tramo.

The other thing that really screws workers is that most inflation on consumer prices here does not follow annual inflation - things without price controls like most foods and clothing run far ahead of the average (which paritarias are usually largely based on), even on a monthly basis, meaning the only way to afford them is to cut back or go without until in 6 months to a years time maybe you can afford them again for a few months until you can't any more and the cycle repeats.

 

[Jimbob]

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.

I went back to the UK and returned after 7/8 months and was surprised the price hike on almost everything. Agreed that public transport is not increasing at the rate of everything else, but this is a government subsidised enterprise I would have thought(the prices just don't add up to the service paying for itself) and therefore not a particularly good metric if this is being done on purpose. Again the price of crude oil has fallen nearly 10% from Dec 21 to Dec 22 according to a quick google search. I'll caveat this by saying I don't buy any imported goods here at all, this is based on eating out, food shopping, price of a beer and the such.

 

[Traveler]

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!

 

[Rich One]

The Blue dollar value by the end of January 2023 will be close to the 2022 inflation of 95% . So far it's about 80% there at $370 . A small time lag ..!!