Soaring prices hit Argentines, and economic news

Buenos Aires, Argentina – In Argentina like this, prices are one of the things you can’t guarantee.

Just ask Diego Varela and Claudio Caeta, who own a small aluminum and glass shop in Palermo’s Buenos Aires neighborhood. Business His partners have been virtually paralyzed for the past two weeks as the country’s economic climate has been volatile and they have been unable to procure the materials they need and offer prices to their customers.

“Our provider offers us nothing, because [United States] The dollar goes up every day, so they don’t want to lose money,” said Barrera, 43.

“The same thing happens to me, so I understand,” he said. “We are already losing money at the prices we quoted to some customers.”

This reality has become alarmingly common in Argentina, where economic collapse is accelerating. The rise in the value of the US dollar is actually a measure of the sharp decline in the value of the Argentine peso, which plunged as much as 25% on the black market in April. Discounted $1 to 500 pesos at the unofficial rate. This is the rate most often used as a benchmark for the average Argentinian. This is because currency controls limit purchases at the official exchange rate.

and Inflation over 104% Official statistics show that in the last 12 months, it’s gotten harder to know the value of anything, let alone your budget for groceries. In the Greater Buenos Aires region, food prices alone saw him rise an average of 10% in March compared to the previous month. Fruits and vegetables are about 15%. 25 percent eggs.

Raw materials, such as those handled by Barrera and Cayeta, are also unpredictable as their prices fluctuate depending on the value of the currency. Barrera said glass prices rose 10 percent in mid-April and he was notified by the provider of his second price increase by the same amount two weeks later.

Glass shop owner Diego Barrera has seen his business virtually come to a halt when volatile prices prevent him from sourcing materials. [Natalie Alcoba/Al Jazeera]

All of this fueled a climate of political instability in the election year.The very unpopular President Alberto Fernandez officially announced he will not seek re-electionand later accused the currency of depreciating due to rumors and speculation provoked by right-wing politicians.

In a tweet, Economy Minister Sergio Massa said he would use “all the tools of the state to dictate this situation,” including the International Monetary Fund (IMF) to repay $44 billion in loans. It included redefining the terms of the controversial agreement with

The unofficial exchange rate plummeted to 460 pesos to the dollar after Argentina’s central bank intervened on April 25 to trade bonds in a move contrary to its agreement with the IMF. Argentina has also announced that it will start paying for Chinese imports in renminbi instead of dollars.

But on the road, the volatility damage is already done.

“Aim for the lowest price”

Grocery prices are changing weekly in Argentina as inflation soars [Natalie Alcoba/Al Jazeera]

As Emiliano Espindra, 47, mixes feta cheese with spices, tomatoes and cucumbers behind a takeout shop in the Middle East. He was a cook in Belgrano, a wealthy neighborhood in Buenos Aires, where people were probably insulated from the financial turmoil of the week, he noted. But not he, a laborer who works to support his adolescent daughter. Espindola plans to take odd jobs as a construction worker to make ends meet.

“I’m always looking for the best price, but at the same time cutting costs,” he said. Prices go up every month, and let’s not even talk about groceries, there’s one price one week and another the next.”

For Yolanda Gonzalez, a 53-year-old nurse and primary breadwinner at home, the solution is to reduce the number of meals her family eats. They cannot change clothes and limit their outings to what they are free. Accompanied by traditional mate, for example, on a sunny afternoon in the park. “Working 24 hours is not enough. Working 30 days is not enough,” she said.

Martin Kalos, an economist and director of EPyCA Consultores, a Buenos Aires-based firm, said Argentina has spent most of the past 12 years in either recession or stagnation.

Nearly 40% of the population lives in poverty, with 1 in 2 children living below the poverty line, according to the latest 2022 statistics, according to census takers. The crisis dates back 40 years to her, slowly eroding the country’s productive capacity and widening the gap between rich and poor.

“Argentina urgently needs to restore growth, but first it needs to stabilize the economy, which has not been achieved,” Kalos said. “Inflation in Argentina is not only over 100%, he is changing rapidly, and we do not know how close he will be to 130% or 150% next year.”

The Argentine government has turned to price-fixing schemes to soften the blow of rampant inflation, striking deals with major grocery chains. However, these programs also have limitations. Supply varies from store to store, and small grocers are not subject to price-fixing and must stock shelves with wholesalers, making it impossible to compete for the lowest prices offered.

cheaper alternative

In her grocery store, Victoria Alcobar now sells “unofficial” cigarette packets as an alternative to the more expensive big brands. [Natalie Alcoba/Al Jazeera]

The constant rise in prices means that cheaper branded products are flooding the market.

Victoria Alcober holds out some “unofficial” cigarette packets she started offering at a small grocery store in the city of Ensenada, about an hour from the capital of Buenos Aires. It was her own customers who informed her that her packs were about one-third the price of the larger, well-known brands.

“As a merchant, you have to go look for them because that’s what people are buying today,” she said. There are many alternative brands that we use.”

Argentines are also looking for political alternatives. Presidential and legislative elections took place in his October, and a deepening economic recession prompted radical moves to abolish the peso altogether and use the US dollar as the official currency, notably a proposal promoted by libertarian candidate Javier Milay. position has been restored.

Glazier owner Barrera is deeply frustrated and exhausted by the daily economic uncertainty and the uncontrollable political class. But he worries that extreme positions such as the dollarization of the economy will only make matters worse and that good leadership alternatives won’t materialize. “They know they get burned.”

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