This is what happens when you artificially keep the dollar cheap, and inflation remains high. Couple this with businesses that hedged (because Milei sold the lie that we were going to dollarize, so they raised prices in anticipation) and the fact that basic macroeconomic theory broadly doesn't work in Argentina, and you create the situation we have today. If the dollar only appreciates by 2% a month, yet inflation remains in the double digits, this causes a monthly increase in the cost of goods in dollarized terms of between 8% and 23%/month. This is why traffic flows have reversed and now Argentines buy blue/MEP dollars, and go to Chile, Paraguay, and Brazil to buy clothes, food, and basic goods because even stuff made in Argentina is cheaper there.
I was in Jumbo and those small containers of Haagen Daz are $18,000 lol. They were always expensive here, but never more than $6-$8. Businesses would rather throw stock out/eat a loss than reduce prices to recover their original investment, so this is why I don't believe in Milei's idea that the market will regulate itself, that's just not how Argentina works, especially while he maintains heavy import duties. Loaves of bread were $6,000, and 2.25L of Coke Zero were $2,900. While Jumbo is expensive, it's comparable to being Whole Foods, and I was in one in California last month and things were either the same price or more expensive here.
There was an article today about how pan lactal is going to be imported from Brazil, made from Argentine flour, and sold for 35% cheaper than Bimbo here; this is how distorted our economy is, nothing works the way it should (as Simon Kuznets said, there are 4 types of economies: Developed, Developing, Japan, and Argentina).
Pero viva la libertad, carajo!
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