The owner of a trendy wine bar in Buenos Aires has seen the price of beef increase by 73 percent and the price of zucchini for salads by 140 percent in the past two weeks. The Uber driver paid him 60% more to fill up his tank of gas. One father also said he spent twice as much on diapers for his toddler as he did last month.
In Argentina, a country synonymous with rampant inflation, people are used to paying more for almost everything. But under the country’s new president, life is quickly becoming even more painful.
When Javier Millay was elected president on November 19, the country was already suffering from the world’s third-highest inflation rate, with prices rising 160% year-on-year.
But since Mr. Millay took office on Dec. 10 and quickly devalued Argentina’s currency, prices have soared at a dizzying pace, and many people in this South American country of 46 million have lost their jobs. We are making new calculations about how our businesses and households will survive in the future. The country is already suffering from a severe economic crisis.
“Ever since Millay won, we’ve been worried,” said Fernando González Galli, 36, a philosophy teacher at a high school in Buenos Aires.
Before diaper values erode even further, Galli is saving money to avoid making life worse for her two daughters, who are 6 years and 18 months old, by switching to cheaper brands and rushing through Argentine pesos. I’m trying to. “As soon as I get paid, I go buy everything I can,” he said.
Nahuel Carbajo, 37, owner of the trendy Naranjo Bar wine bar in Buenos Aires, like most Argentines, is used to regular price hikes, but last week he went far beyond what even he was used to. He said it had exceeded that of the previous year.
Since Mr. Millay’s victory, the price of Mr. Carballo’s premium steaks has soared 73% to 14,580 pesos (about $18) per kilogram (about 2.2 pounds). A 5-kilogram box of zucchini has increased from P6,500 to P15,600. Avocado prices have increased by 51% since the beginning of this month.
“Salaries and people’s incomes can’t adapt this quickly,” Carbajo said.
Manuel Adorni, Mr. Millay’s spokesman, said the acceleration in inflation was an inevitable consequence of finally fixing Argentina’s distorted economy.
“We have a lot of problems and unresolved issues that we need to start addressing,” he said. “Inevitably, we will experience several months of high inflation.”
Mr. Millay has warned Argentines that his plan to shrink the government and rebuild the economy will initially be damaged. “I’d rather tell uncomfortable truths than comfortable lies,” he said in his inaugural address, adding last week that he wanted to end the country’s “model of decline.”
Argentina’s economy has been in crisis for years due to chronic inflation, rising poverty, and a collapse in the value of its currency. The economic turmoil paved the way for Milais, a political outsider, to become president. Mr. Milley has spent years as an economist and television commentator criticizing corrupt politicians who have destroyed the economy, often for personal gain.
During his campaign, he vowed to bring chainsaws to bear on public spending and regulation, even brandishing an actual chainsaw at a rally.
After Milais’ victory, prices began to rise faster due to expectations for her new policies.
The previous leftist government used complex currency controls, consumer subsidies and other measures to inflate the official price of the peso and keep prices for key goods such as gas, transportation and electricity artificially low.
Mr Millay wasted little time as he vowed to put everything back together.
Two days after taking office, Milley began cutting government spending, including consumer subsidies. He also devalued the peso by 54%, bringing the government’s exchange rate much closer to the market’s valuation of the peso.
Economists said such measures were needed to solve Argentina’s long-term fiscal problems. But it also brought short-term pain in the form of faster inflation. Some analysts have questioned the lack of adequate safety nets for the poorest Argentines.
According to government data, prices rose 13% in November compared to October. Analysts expect prices to rise another 25-30% this month. And some economists are predicting an 80% rise between now and February, said Santiago Manoukian, chief economist at economic consulting firm Ecolatina.
This forecast is driven in part by soaring gas prices, which rose 60% from Dec. 7 to Dec. 13, creating a trickle-down effect on the economy.
Due to currency devaluation, imported goods such as coffee, electronics, and gas quickly became more expensive as they are priced in US dollars. For example, the cost of a monthly Netflix subscription in Argentina soared 60% to 6,676 pesos ($8.30) the day after the devaluation. Additionally, some domestic producers, such as farmers and ranchers, have begun raising prices to match their own rising costs.
With chronically high inflation, unions often negotiate large pay increases to maintain the same, but these wage increases are quickly consumed by rapidly rising prices. Irregular workers, who make up nearly half of the economy, including nannies and street vendors, have also not received such raises.
On Wednesday, Milais took the next big step in rebuilding the government and the economy, issuing an emergency decree that drastically reduces the state’s role in the economy and eliminates numerous regulations.
The measure prohibits states from regulating the rental real estate market or placing limits on the fees banks and health insurance companies can charge customers. Revise labor laws to make it easier to fire workers, and also place limits on strikes. It will also allow state-owned enterprises to become joint stock companies and be privatized.
Many legal analysts immediately questioned the constitutionality of the decree, accusing Milley of trying to overthrow Congress.
After the speech, people across Buenos Aires, including retiree Jesasa Orfelia Peralta, 73, took to the streets to show their displeasure by banging pots.
She was worried that rising prices would make adequate medical care too expensive for her and her husband. Even though she had severe problems with her spine, she went out using a walker and did not hesitate to vent her anger in public, she said. “Where else could she be?” she said.
Millais has sought to thwart protests by canceling welfare programs and threatening to fine people who take part in demonstrations that block roads. Human rights groups have widely criticized such policies as restricting the right to peaceful protest.
For now, most Argentines are wondering how to make ends meet in a situation that often feels like both a complicated path of economics and a frenzied sprint to buy before prices rise again. I’m trying to find out what to do.
“We always say we are in college, but every five minutes of every day we are taking difficult exams,” said Roberto Nicolas Ormeño, owner of El Gaucito, a small empanada shop in downtown Buenos Aires. Ta.
Ormeño said he scours the market for raw materials and changes suppliers almost every week because they either raise prices too high or provide poor quality products.
He’s trying not to pass on too many price increases to customers, but it’s unclear how long he can maintain that. “I often see my regular customers buying a dozen empanadas instead of two,” he says.
Marisol del Valle Cardoso, who has a 3-year-old daughter, is eating less, turning to cheaper brands and going out less to make ends meet. “We don’t really turn on the air conditioning,” she said. “We’ve reduced our weekend plans from four times a month to one.”
Cardoso, who works at a police station on the outskirts of Buenos Aires, said he received a raise this year, but it’s already not enough. She also drives for Uber, but she said her fare increases haven’t kept up with rising gas prices.
Despite the challenges, Cardozo said she remains a supporter of Millay and hopes his policies work.
“We were living under an illusion,” she said, referring to gas prices before the recent increases. “If you need to make these adjustments to ultimately grow, it’s worth it.”
jack nickas I contributed a report from Rio de Janeiro.
