Is the expat party coming to an end?

[Tar Baby]

What will be the likely consequences for expats?

IMO, as the peso gradually strengthens in response to the anticipated fiscal and monetary reforms, purchasing price parity will decrease for expats converting dollars in an inverse relationship; thus raising relative costs for dollar based fixed income expats. The economy has been grossly deranged for a long time, an aberration. And now, presumably, some degree of sanity will commence. Expectations in international financial markets bear this out. Just look at the one month chart for Global X Funds - Global X MSCI Argentina ETF.

It's been a long smooth ride for the economic refugees here. That is likely to change. How quickly is the question.

 

[steveinbsas]

For many expats, the party was already over in 2016, when the peso was "stuck" at 15 to one:

It's Too Expensive Here!

I know this is an old theme but I'm interested if there are others who find the cost of living difficult to manage. With the dollar stagnant against the peso, I find my costs all the more out of control. The BA Herald had an article the other day predicting 45% inflation this year.

baexpats.org

The first sentence in the first post of the thread I linked to in the above quote begins with "I know this is an old theme..."

Here is a thread that indicated the expat party was not going as strong in 2012 as it was in prior years:

Amazing how expensive BsArs is

I just returned to Europe and I'm looking at the figures of my spending in BsArs: can't believe how much I paid there for daily life-goods like food. I didn't buy clothes, electronic devices or other stuff which I already knew are mucho more expensive than in Europe. I didn't go out to diner...

baexpats.org

...and many of the posters have long since stopped posting on this site and/or stopped living in Argentina

 

[desde_Holanda]

IMO, as the peso gradually strengthens in response to the anticipated fiscal and monetary reforms, purchasing price parity will decrease for expats converting dollars in an inverse relationship; thus raising relative costs for dollar based fixed income expats. The economy has been grossly deranged for a long time, an aberration. And now, presumably, some degree of sanity will commence. Expectations in international financial markets bear this out. Just look at the one month chart for Global X Funds - Global X MSCI Argentina ETF.

It's been a long smooth ride for the economic refugees here. That is likely to change. How quickly is the question.

Agree. The dolar blue / euro blue rates don't reflect the 'real' value against the peso. USD and EUR have been artificially strong because of the restrictions. I wouldn't be surprised if life for people that currently rely on Western Union transactions or so will get 40 - 50% more expensive in the next year or two.

 

[oddDistribution]

It seems like people are

The first sentence in the first post of the thread I linked to in the above quote begins with "I know this is an old theme..."

Here is a thread that indicated the expat party was not going as strong in 2012 as it was in prior years:

Amazing how expensive BsArs is

I just returned to Europe and I'm looking at the figures of my spending in BsArs: can't believe how much I paid there for daily life-goods like food. I didn't buy clothes, electronic devices or other stuff which I already knew are mucho more expensive than in Europe. I didn't go out to diner...

baexpats.org

...and many of the posters have long since stopped posting on this site and/or stopped living in Argentina

Has anyone tried to do the reforms Milei is promising since that time? I'm actually asking, not trying to make a point.

 

[QuilmesSlo]

It seems like people are

Has anyone tried to do the reforms Milei is promising since that time? I'm actually asking, not trying to make a point.

Apart from the dollarization plank, I think India is probably the closest model for moving from a high tariff, fairly socialized economy to a lower tariff, more private economy. Dollarization, the most obvious comparator is Ecuador.

 

[QuilmesSlo]

fwiw, I don't buy into this doom and gloom about imminent cost of living increases. In fact, I think the next two to three years will involve meaningful dislocation that will ensure that hard currency goes far.

 

[steveinbsas]

In fact, I think the next two to three years will involve meaningful dislocation that will ensure that hard currency goes far.

Please explain what you mean by the expression "meaningful dislocation" (to what and/or to whom it applies).

 

[lunar]

Apart from the dollarization plank, I think India is probably the closest model for moving from a high tariff, fairly socialized economy to a lower tariff, more private economy. Dollarization, the most obvious comparator is Ecuador.

Many "shock therapy" programs implemented in Eastern Europe after the collapse of communism were quite similar, in my opinion. No dollarization, of course, but these efforts involved the privatization of inefficient state-run companies. See, for example, Balcerowicz Plan in Poland and 500 Days Program in Russia.

It was not an easy walk in the park, with the economy declining strongly immediately afterward. I recall, a lot of desperate people complaining that there was too little therapy and too much shock.

 

[QuilmesSlo]

Please explain what you mean by the expression "meaningful dislocation" (to what and/or to whom it applies).

I think you'll see substantial unemployment increases. Direct government layoffs. Privatization layoffs. Domestic industries that rely on import tariff layoffs. I don't think the export sector can ramp fast enough to absorb the employees. And I think it will take a while to get foreign capital back into mining, oil and gas.

 

[QuilmesSlo]

for the next two to three years, I am far more concerned by the prospect of increased insecurity (i.e. crime) than a rise in cost of living.