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

[DotConnector]

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!

Peronism (in its last evil form, Kirchnerismo) had all kinds of prices and tariffs ARTIFICIALLY down. This is one of their central point of government model.
Example?
Historic average litter of gas (petrol) price in Argentina has been Usd .75 to a dollar. November 2023 was down to about usd 30 cents, clearly that created huge price distortions.
Come Milei and the libertarian made a huge, huge mistake:
he said the peso was of mierda (crap) value and he would do away with the peso and replace it with US dollars Ecuadorian style.
What was Milei’s ginormous mistake?
Captains of industry (aka grandes empresarios) believing Milei’s intention, decided to COVER THEMSELVES BY BETTING THE PESO would devalue to $2000/$2500 per US dollar. They priced almost everything against such numbers but the peso never reached such low prices and captains of industry never lowered their prices to reflect actual peso value against the USA dollar. In other words, most prices for goods and services are still valued at a $2000/dollar ratio…
Milei has allowed import for some products in order to put downside pressure but that can only work for a little while as our beloved president Trump (aka carrot top) is also finding out with high tariffs on everything in the USA...
If Milei would have said:
we will try NOT to emit pesos endlessly (aka quantitative easying QE) and instead we will try quantitative tightening QT… captains of industry would have adjusted their prices more according to reality.
So there it is, Milei’s big mouth (another great coincidence with carrot top in the home of the free) rather than help average argentines, he ended up hurting them big as prices went to the roof.
The other huge, huge mistake was Kirchnerismo greatest gift:
they left the argentine central bank not only with cero US dollar reserves (which in itself should be a crime!) but to add insult to injury, they left the central bank INDEBTED for usd 12 billion!!!!
Milei took 12 months just to cover half such debt. It seems milei didn’t know that in order to do away with pesos you have to have your central bank full of… US dollars!!!
He need at least 20 to 30 billion dollars as reserve. Today! Feb 2026, the argentine central bank is STILL underwater by 10 billion. It is because of this reason that the CEPO to businesses is still in place.
For those of you unfamiliar with the term cepo (clamp), it refers to strict, long-standing government-imposed controls on buying U.S. dollars and moving capital abroad, designed to protect dwindling central bank reserves.
That is a long, long explanation of the reason behind prices in Argentina being so freaking high.
Last but not least, captains of industry are mostly monopolies in Argentina. Let’s take Fate, a local manufacturer of car tires .
They are also a monopoly of the aluminum industry btw.
A car tire that would cost Usd 40 in Paraguay or Chile here in Argentina the same tire would cost about 100-140 US dollars. Milei tried allowing tire imports from China so what did Fate do? They started importing tires themselves BUT… they matched local argentine prices!!! Being a monopoly allows you to muscle your way into the market anyway you want…
That in a nutshell is the whole problem behind Argentina getting so expensive from one day (Dec 2023) to the other…

 

[SlowWalker]

Peronism (in its last evil form, Kirchnerismo) had all kinds of prices and tariffs ARTIFICIALLY down. This is one of their central point of government model.
Example?
Historic average litter of gas (petrol) price in Argentina has been Usd .75 to a dollar. November 2023 was down to about usd 30 cents, clearly that created huge price distortions.
Come Milei and the libertarian made a huge, huge mistake:
he said the peso was of mierda (crap) value and he would do away with the peso and replace it with US dollars Ecuadorian style.
What was Milei’s ginormous mistake?
Captains of industry (aka grandes empresarios) believing Milei’s intention, decided to COVER THEMSELVES BY BETTING THE PESO would devalue to $2000/$2500 per US dollar. They priced almost everything against such numbers but the peso never reached such low prices and captains of industry never lowered their prices to reflect actual peso value against the USA dollar. In other words, most prices for goods and services are still valued at a $2000/dollar ratio…
Milei has allowed import for some products in order to put downside pressure but that can only work for a little while as our beloved president Trump is also finding out with high tariffs in everything….
If Milei would have said:
we will try NOT to emit pesos endlessly (aka quantitative easying QE) and instead we will try quantitative tightening QT… captains of industry would have adjusted their prices more according to reality.
So there it is, Milei’s big mouth (another great coincidence with carrot top in the home of the free) rather than help average argentines, he ended up hurting them big as prices went to their the roof.
The other huge, huge mistake was Kirchnerismo greatest gift: they left the argentine central bank not only with cero is dollar reserves (which in itself should be a crime!) but to add insult to injury, they left the central bank INDEBTED for usd 12 billion!!!!
Milei took 12 months just to cover half such debt. It seems milei didn’t know that in order to do away with pesos you have to baje your central bank full of… is dollars!!!
He need at least 20 to 30 billion dollars as reserve. Today! Feb 2026, the argentine central bank is STILL underwater by 10 billion. It is because of this reason that the CEPO to businesses is still in place.
For those of you unfamiliar with the term cepo: ("clamp") refers to strict, long-standing government-imposed controls on buying U.S. dollars and moving capital abroad, designed to protect dwindling central bank reserves.
That is a long, long explanation of the reason behind prices in Argentina being so framing high.
Last but not least, captains of industry are mostly monopolies in Argentina. Let’s take Fate, a local manufacturer of car tires .
They are also a monopoly of the aluminum industry btw.
A car tire that would cost Usd 40 in Paraguay or Chile here in Argentina the same tire would cost about 100-140 US dollars. Milei tried allowing tire imports from China so what did Fate do? They started importing tires themselves BUT… they matched local argentine prices!!! Being a monopoly allows you to muscle your way into the market anyway you want…
That in a nutshell is the whole problem behind Argentina getting so expensive from one day (Dec 2023) to the other…

When Milei won in August I think the peso spiked up to 700-800 range on the Blue Market, and then when he actually one it spiked up to 1100.

Captains of industry and many of the economic consultants highlighted what would be required for dollarization of the economy prior to the electrions. There is no surprise to them. The talk back then was requiring $40B+ to dollarize the economy.

What companies were pricing aganist an FX rate of 2000 ARS to the USD? Companies either were buying on the blue market, or CCL at a premium to the official rate. They then had to justify a high price in the market to pay it back. The official rate for many didn't mean much because of limits and taxes.

My understanding is that last April when they removed the Cepo, there were rules for businesses to slowly remove money held within the country so as to not devalue the peso too much at once. But all new dividends were not being controlled and could be sent from the country.

Some of the taxes that the head of the textile industry mentioned are common all across the world. The taxes here that are especially tough are the taxes on gross revenues: 1) Provincial ~3-4%, 2) 1.2% (0.6% receiving +0.6% sending from account). Also, registered businesses (not monotributo) are required to collect and pay IVA. However, monotributo are not, therefore if you buy a good from a monotributo business and then sell it, you are not getting the typical pass through credit of IVA on the purchase since it was never paid. This makes it harder for smaller businesses to compete with the larger ones on certain things and thus may charge a higher price to recover the 21%.

The biggest issues or monopolies and being used to large profit margins, which were due to protectionist policies. As a result productivity is unlikely to be at globally competitive levels.

The cost of money here was always expensive, they could not go out and take a loan due to prohibitive interest rates. Now they have access to raising debt in USD abroad at still elevated but more normal interest rates. This makes financing expansions, projects etc more difficult historically. It also would incentivize them to charge as high as possible to earn back the investment as soon as possible.

Some of the companies now may be willing to close plants with the hopes that it forces a change of policy. This is no different than mining companies threatening to shut coal mines due to carbon taxes or other topics.

Edit: If i remember correctly, the heads of business, and CEO survey at the time of the Milei election were suggesting that the price of the peso should be around 1000 at the time.

 

[devilclam]

I wouldn't use chicken wings in soup, too much skin and fat, best done crispy in the air fryer for example, in my opinion.

At Polleria Avicola out here 10kg wings will set you back 32500 Pesos.

I was actually excited to see chicken wings back on the menu…even if it is a sign of the times.

I made some stock recently from chicken wings because they were given to me for free because the pollería didn’t have carcasses, and once cold it had that good jello-like jingle that only collagen can provide.

 

[Rich One]

I was actually excited to see chicken wings back on the menu…even if it is a sign of the times.

I made some stock recently from chicken wings because they were given to me for free because the pollería didn’t have carcasses, and once cold it had that good jello-like jingle that only collagen can provide.

Wings are ideal for collagen soup.

 

[BA Bike Guy]

- - Thread topic interlude - -
Regarding my cost of living, in terms of U$D, comparing BA Nov-Jan least year to this year, expenses are 25% less, which is great, but expenses in my home city, Philadelphia, increased by about 15%. Since I have expenses in both places year round, I'm really only saving 10% when I'm here. Up until a few years ago, I thought I'd be here at like 35% saving.... it is what it is, I love both places' quality of life, but can't stop working yet...

 

[brandon]

https://www.investopedia.com/5-sout...or-an-affordable-retirement-lifestyl-11899079

Spoiler: Salta is on the list
Any expats there to confirm?

 

[Alby]

https://www.investopedia.com/5-sout...or-an-affordable-retirement-lifestyl-11899079

Spoiler: Salta is on the list
Any expats there to confirm?

I am in Salta for around 10 days every six weeks or so. In my experience, eating out is considerably more affordable than in Buenos Aires. AirBnB rates about 12 months ago were maybe 2/3 the cost of comparable apartments in Cordoba, but I haven't checked lately. Most other living costs seem to me to be the same as CABA. It's a great small city in a lovely part of the country.

 

[Rich One]

Chapeau to Milei and Caputo they discovered how to step on the Blue Dollar..? Before the Kukas were running scared with the out of control. roller-coaster of the Blue dollar, The blue dollar had a mind of it's own.

 

[Dim Witty]

- - Thread topic interlude - -
Regarding my cost of living, in terms of U$D, comparing BA Nov-Jan least year to this year, expenses are 25% less, which is great, but expenses in my home city, Philadelphia, increased by about 15%. Since I have expenses in both places year round, I'm really only saving 10% when I'm here. Up until a few years ago, I thought I'd be here at like 35% saving.... it is what it is, I love both places' quality of life, but can't stop working yet...

Hey Bike Guy. Born and raised in Philly, too. Lived in Logan, then moved to Cheltenham Township. And you?

 

[Rich One]

Coffee went up more than 10 % from 3.6 K to 4.0 K pesos. I ordered tea for 3.0 K pesos will continue to drink tea as an act of resistance . I urge you to do likewise..!