How's everyone hanging in there with the cost of living these days?

[devilclam]

Hi all,

I've been in Buenos Aires for almost two years now—I love it, and I have no intention of leaving anytime soon. But oof, the dollar's purchasing power has certainly gone down under Milei.

Just curious for those of you who have been here for a while... how ya hangin' in there? What do you expect to happen in the coming months/years (especially for those who have experienced these up-and-down cycles before)?

I'm no economist and probably grossly underinformed, but if the peso is more or less holding value these days, why are the costs of goods still going up week to week? Are businesses just 'making hay while the sun shines' and keeping the profits? Are employees still receiving regular salary adjustments?

I'm very fortunate and privileged to be financially stable, but I imagine this past year has decimated what was left of the middle class. It's visible that the number of people living in poverty is growing by the day.

Curious to hear other folks' thoughts and experiences!

 

[dlish]

I’ve been here two years too. Costs are definitely starting to hurt. I never thought the cost increases in dollars would last this long, so what do I know I still really enjoy living here but the prices are starting to impact that.

 

[Lanick]

How about many of us get together and start our gringo farm?! There are a lot of farmers who’d jump on the offer for a steady usd income. It’ll be like a co-op. We will hire the farmer with his land and he/she will supply us the vegetables, eggs, meat, diary. All natural! He will be farming rather than chemical experimenting! Old school farming. There are a lot of places around BsAs to do that. We slash the cost and eat healthy. We have the food inspected and if he’s messing around with the produce he can say goodbye to his steady monthly usd income. What do you people think?

 

[Che1990]

The thing is prices we’re artificially cheap 2 years ago.

The dollar blue was worth double the official exchange rate, which regulates lots of prices in the economy. This made things very cheap for those with foreign currency. My electricity bill was less than $2 USD in the last few months of 2023.

Now the official rate has been “fixed”, and with price controls being lifted and subsidies being removed, prices are correcting themselves.

Luckily, the inflation rate is dropping and expected to be at 3% for last month. The official exchange rate is devalued by 2% per month, so we are getting close to where inflation and devaluation are the same.

In theory, this should mean we don’t feel more inflation in dollars. In theory - you never know with Argentina.

 

[dlish]

prices are correcting themselves

Things may have been artificially cheap but prices aren't just "correcting", companies are trying to grab cash while they can in this crazy time. For example - how on earth is yoghurt made locally more expensive than yoghurt in the USA where salaries of the people making the yoghurt are 20x higher than here? Or gas - the USA gets its gas mostly from foreign countries and it's cheaper than the prices here at YPF where it is all mostly Argentinean gas.

I'm not just pulling this theory from my backside, I have friends here who own food companies and they told me point blank they just keep raising the prices because they can and are making more profit from it. It has nothing to do with correcting prices, and of course none of this profit trickles down to the workers in any way, the bosses keep all of it.

If prices here were now on par with Madrid, I would say that was "correcting". But we have far exceeded that, and are already at or exceeding US pricing, with local people here making much less than in Madrid, never mind the USA

 

[VincentKMcMahon]

If Cristina comes back will things be cheap again

 

[redlobster]

... and of course none of this profit trickles down to the workers in any way, the bosses keep all of it.

Ah, nothing like reading some commie-talk to start the day right!

 

[dlish]

Ah, nothing like reading some commie-talk to start the day right!

I'm as far from a commie as it gets, I'm a full red blooded American capitalist. I'm just commenting on the "prices being corrected" - it isn't a correction, it's profit for company owners, that is all I'm saying. We both know that people on the street are not getting significant salary raises even though prices have tripled and more. I didn't say they *should* get (commie talk); I said they *didn't* get; which is plain fact.

 

[Che1990]

I'm as far from a commie as it gets, I'm a full red blooded American capitalist. I'm just commenting on the "prices being corrected" - it isn't a correction, it's profit for company owners, that is all I'm saying. We both know that people on the street are not getting significant salary raises even though prices have tripled and more. I didn't say they *should* get (commie talk); I said they *didn't* get; which is plain fact.

I don’t doubt some prices are absurd here. I went to buy some sun cream yesterday and was shocked.

One thing to keep in mind with prices in Argentina compared to the US is the tax burden here.

21% VAT/sales tax built in to everything, then all the taxes and cost along the supply chain (like social charges etc). This inevitably gets passed on to the consumer.

And there is also the idea that the peso is overvalued now, reflecting high costs in USD.

 

[Rich One]

I'm as far from a commie as it gets, I'm a full red blooded American capitalist. I'm just commenting on the "prices being corrected" - it isn't a correction, it's profit for company owners, that is all I'm saying. We both know that people on the street are not getting significant salary raises even though prices have tripled and more. I didn't say they *should* get (commie talk); I said they *didn't* get; which is plain fact.

Maybe the Reagan/Bush trickle-down theory aint working in Argentina ? Milei assured prices would correct themselves, no price fixing here. Prepagas believe in price gouging.Call Milton.