Hurt by high prices, Argentines seek cheaper goods abroad

[Larry]

Another article that talks about the dearly high prices in Argentina.

"Argentina became expensive," said Buenos Aires-based economist Marina Dal Poggetto from consultancy EcoGo, estimating pesos were in real terms three times stronger now than in mid-2023 when the country was the cheap destination in the region. At the same time, Brazil's real currency has fallen to a record low.

Argentine prices for some goods have long been distorted by currency controls and high taxes, but now almost everything is more expensive.

A McDonald's Big Mac – often used as a playful index of local prices – sells for up to 7,600 pesos in Argentina ($7.37 at the official exchange rate), versus some $4.49 in Brazil, $5.56 in Mexico or $6.89 in Brooklyn, New York. Prices do vary between outlets even within the same city.

"I just bought one of my kids a pair of ankle boots here at Nike and I paid around $25. Back home you're talking the same shoes costing $100 to $150," said Argentine Melanie Galarza at a mall in Santiago.

Reuters saw a popular Stanley brand thermos for sale in Santiago for 55,000 Chilean pesos ($56) versus 140,000 Argentine pesos in Buenos Aires ($135). A luxury box of Lancome makeup and face creams costs about $160 in Chile versus an eye-watering $726 in Argentina.

The trend is a potential headache for the government, which is trying to keep depleted reserves in the country. Argentina's service sector deficit spiked in October, driven by travelers spending on tickets and purchases overseas. The strong peso also ramps up pressure to devalue.

"It's so expensive here," said Cecilia Cugnaso, getting ready to depart for Brazil from an airport in Buenos Aires. "In Argentina, everything you buy is expensive. Brazil is practically half the price."

Hurt by high prices, Argentines seek cheaper goods abroad

In the shopping malls of the Chilean capital and the famous beaches of Brazil, Argentines are looking to snap up various goods, from clothes to...

www.dailysabah.com

 

[Avocado]

How does this government think that domestic prices will come down??? Central bank shouldn't be calm about this trend. Nothing should be more expensive in Argentina than USA. Certainly not a big mac sandwich.

 

[Betsy Ross]

Typically what happens is the peso eventually devalues. Although nothing typical about Milei. But I agree that prices are too high compared to incomes. I think some things like electronics and clothes will have to come down now that they are reducing or getting rid of some taxes. But local companies are stubborn and will probably kick and scream and then by the time they lower prices it will be too late and they will be out of business.

 

[Blockchain]

How does this government think that domestic prices will come down??? Central bank shouldn't be calm about this trend. Nothing should be more expensive in Argentina than USA. Certainly not a big mac sandwich.

I doubt the Central bank would admit they were worried even when they are. I read a post somewhere on this forum from Milei that he was worried about exchange rate but haven't read anything since then. Caputo probably told him to shut up.

 

[Jenn]

Another article that talks about the dearly high prices in Argentina.

"Argentina became expensive," said Buenos Aires-based economist Marina Dal Poggetto from consultancy EcoGo, estimating pesos were in real terms three times stronger now than in mid-2023 when the country was the cheap destination in the region. At the same time, Brazil's real currency has fallen to a record low.

Argentine prices for some goods have long been distorted by currency controls and high taxes, but now almost everything is more expensive.

A McDonald's Big Mac – often used as a playful index of local prices – sells for up to 7,600 pesos in Argentina ($7.37 at the official exchange rate), versus some $4.49 in Brazil, $5.56 in Mexico or $6.89 in Brooklyn, New York. Prices do vary between outlets even within the same city.

"I just bought one of my kids a pair of ankle boots here at Nike and I paid around $25. Back home you're talking the same shoes costing $100 to $150," said Argentine Melanie Galarza at a mall in Santiago.

Reuters saw a popular Stanley brand thermos for sale in Santiago for 55,000 Chilean pesos ($56) versus 140,000 Argentine pesos in Buenos Aires ($135). A luxury box of Lancome makeup and face creams costs about $160 in Chile versus an eye-watering $726 in Argentina.

The trend is a potential headache for the government, which is trying to keep depleted reserves in the country. Argentina's service sector deficit spiked in October, driven by travelers spending on tickets and purchases overseas. The strong peso also ramps up pressure to devalue.

"It's so expensive here," said Cecilia Cugnaso, getting ready to depart for Brazil from an airport in Buenos Aires. "In Argentina, everything you buy is expensive. Brazil is practically half the price."

Hurt by high prices, Argentines seek cheaper goods abroad

In the shopping malls of the Chilean capital and the famous beaches of Brazil, Argentines are looking to snap up various goods, from clothes to...

www.dailysabah.com

My friends say clothes are just insanely priced in BA. What will happen to all these stores once people can just buy them online? Why would someone pay these rates at a store when they can order it online? Like Lance makeup. Can't people just order online and pay the iva tax? I thought stuff is tax free for the most part now besides that tax. I can't understand why people don't just order that online?

 

[earlyretirement]

My friends say clothes are just insanely priced in BA. What will happen to all these stores once people can just buy them online? Why would someone pay these rates at a store when they can order it online? Like Lance makeup. Can't people just order online and pay the iva tax? I thought stuff is tax free for the most part now besides that tax. I can't understand why people don't just order that online?

Many of these stores will probably eventually go out of business if they don't adjust on their pricing. Local stores and companies haven't needed to compete much before because of huge import taxes. You can see places on Mercado Libre selling this Stanley Thermos for 126,000 pesos. ($105 USD). You can buy it on Amazon and have it shipped and the shipping costs as much as the item. Still IVA and some fees. But it's still expensive by the time you add up all the fees. Plus it will take several weeks to get it.

We live in an "I want it NOW" society and people are willing to pay for wanting it now. But once taxes go way down you you get companies ordering more in bulk, they will have to lower prices or just not sell as much or possibly go out of business.

@Jenn many items can't be shipped to Argentina. Or even though they say door to door sometimes things get caught up in customs.

 

[Nasdaq]

Many of these stores will probably eventually go out of business if they don't adjust on their pricing. Local stores and companies haven't needed to compete much before because of huge import taxes. You can see places on Mercado Libre selling this Stanley Thermos for 126,000 pesos. ($105 USD). You can buy it on Amazon and have it shipped and the shipping costs as much as the item. Still IVA and some fees. But it's still expensive by the time you add up all the fees. Plus it will take several weeks to get it.

We live in an "I want it NOW" society and people are willing to pay for wanting it now. But once taxes go way down you you get companies ordering more in bulk, they will have to lower prices or just not sell as much or possibly go out of business.

@Jenn many items can't be shipped to Argentina. Or even though they say door to door sometimes things get caught up in customs.


View attachment 8360

View attachment 8361


View attachment 8362

Things are still ridiculously priced in Argentina. That is a good example with the thermos. There are many like that. I do think there will have to be some deflation eventually. The problem is the government can't cut taxes too much now as they are depending on that income. The money has to come from somewhere and they cut taxes too much and they will struggle.