“…most ordinary Argentines don’t need any help from the economists to figure out that inflation is raging again.”
– Brian Milner, Argentine inflation forecasters tread carefully, The Globe and Mail
Everyone here knows inflation is high. Anecdotal estimates range from 20% to 40% annually, depending on who you’re talking to and what they’re talking about. The government continues to claim inflation rates of less than 10% annually, a figure that’s not only laughable on the face of it but has been rejected by every responsible economist and regulatory agency both within and without Argentina. In order to stifle controversy the government has taken to fining agencies that publish economic data a half million pesos (around $123,000) if they report anything that disagrees with the official figures. And more recently they’ve been going after journalists and newspapers who don’t toe the line – to the level that the Inter-American Press Society has just “blacklisted” Argentina for its aggressive tactics in silencing the media.
Back to that anecdotal level and while it’s just obvious living here on a day to day basis, I happened across a takeout/delivery menu from one of our favorite local joints from roughly 4-5 years ago, along with the current one that I already had. It pretty much drives the point home with price increases in that period of anywhere from 3½-4½ times. Of course, in dollars terms, with the peso to dollar having gone from below 3:1 to around 4¼:1, and the euro a similar change, in the same period, those increases for visitors are reduced to only about 2½-3 times.
More importantly and assuming this place does not deliver to Sydney so I can order takeaways from them, let’s have a recipe for making great empanadas so I can have some – the menu has my mouth watering…
Haven’t I done a step-by-step for empanadas at some point? If not, I’ll have to remedy that….
I hear a lot of expats comparing prices of simple items from when they arrived a few years ago to the current prices. Maybe you should send your “evidence” to the government to help them understand their inflation figures a little better.
Certainly there is a lot of spin and cooking the numbers in the official INDEC figures. One thing to consider however is that those indices cover all of Argentina, were prices vary wildly. Us city-folk living in the middle-to-upscale neighborhoods of Buenos Aires (say 1mil people) have to face ridiculous prices and constant inflation (even in dollar-amounts), but on a national average much is outweighed by a different economic outlook say in La Matanza, just outside the “City” proper (5mil inhabitants, probably 85% poverty, living of $500 US a month for a family of four)
That doesn’t change that the prices for the people outside of the middle to upscale neighborhoods have skyrocketed as well. The exceptions are the few basic items that the government keeps price controls on. We have family and friends who live in some of those areas and they’re reduced to subsistence living much of the time now – often living on little more than rice, potatoes, pasta and some scraps of the cheapest quality meat. I think you also far underestimate the numbers of people who live in the middle to upscale neighborhoods. If one accepts the government figures (and I don’t know that one should) that the number of people living in poverty has been reduced to 21% of the population from a high of 54% ten years ago, that would mean that there’s nearly 32 million people in the country (of whom nearly 22 million would, based on the averages, be in Buenos Aires province) who do not live in poverty and on whom this high level inflation has a very direct impact.