What happens if Argentina gets too expensive? What are alternative cities/countries to move to when it's overpriced in Argentina?

[Finance Prof]

I think it's safe to say, at least for people earning in USD or other foreign currency, the ARS will eventually go back down. Either gradually through a managed float, or suddenly through a complete removal of the cepo.
At which time, buying power will increase again. It seems about 100% of people think the ARS is overvalued right now.

The only question is whether it kicks off another round of crazy inflation.

Actually not everyone. I just read something that Milei said that the peso is not overvalued and has room to go to 600 to $1 USD. I never found a source for that so not sure if that is made up or not. But I did see an article where he is trying to claim the peso is not overvalued. I am a fan but when I read comments like that I am starting to get vibes he is not being realistic.

The vibe seems to be changing the past few weeks. People are less focused on inflation going down to now talking about how expensive things are in dollars. I don't think Milei is doing himself any favors by saying things like the peso is not overvalued and that it could go to 600.

Now everyone just shrugs their shoulders and says let's see how the elections turn out.

 

[Larry]

The vibe seems to be changing the past few weeks. People are less focused on inflation going down to now talking about how expensive things are in dollars. I don't think Milei is doing himself any favors by saying things like the peso is not overvalued and that it could go to 600.

Now everyone just shrugs their shoulders and says let's see how the elections turn out.

The vibe is changing because Milei is getting more and more out of touch with situation in Argentina. Take to anyone. Anyone and they will tell you peso is overvalued.

He admitted it not long ago Argentina would have problems. Now he is saying that not only is peso not overvalued but that it could go to 600 to $1 USD!

This may be why people are changing their mind on him.

Según Milei, el dólar podría estar a $ 600: su explicación y por qué hoy no ocurre

En una entrevista con A24, el presidente aseguró que la divisa podría bajar del actual nivel en torno a los $ 1200 a $ 600: su explicación.

www.cronista.com

 

[Blockchain]

The vibe is changing because Milei is getting more and more out of touch with situation in Argentina. Take to anyone. Anyone and they will tell you peso is overvalued.

He admitted it not long ago Argentina would have problems. Now he is saying that not only is peso not overvalued but that it could go to 600 to $1 USD!

This may be why people are changing their mind on him.

Según Milei, el dólar podría estar a $ 600: su explicación y por qué hoy no ocurre

En una entrevista con A24, el presidente aseguró que la divisa podría bajar del actual nivel en torno a los $ 1200 a $ 600: su explicación.

www.cronista.com

Say what you want about him Larry. His approval ratings still look good to me. According to these numbers a majority of Argentines still approve of him. Or are you saying these polls are lies?

 

[Larry]

People can say what they want about the Kirchner's but life was much better here for almost everyone. Both expats and locals alike. The best president in Argentina was Nestor Kirchner. Everyone lived well. Argentina now vs. when he was president is about 8-9 times more expensive in dollars to live here.

You could go to Don Julio and eat for $15 for dinner. Now that same meal would be $100 dollars. People would have a living wage and people could pay their bills on time. Now 40% of the buildings pay their condo fees late because they can't make ends meat and pay their bills.

Back then most people made about $500 dollars a month even though minimum wages were about $175 a month and they could live well on that. Utility bills like electricity and water were very low. Monthly expenses were about $30 per month on the typical apartment in Palermo. Now it is about $275 dollars.

For locals to have the same quality of life vs. then you have to be making 10x more in dollars. Back then no one could get credit cards. Now banks are having to give credit cards so people can pay their bills. This is not going to end up well. Why do people think things are different this time?

 

[Anchor Baby]

People can say what they want about the Kirchner's but life was much better here for almost everyone. Both expats and locals alike. The best president in Argentina was Nestor Kirchner. Everyone lived well. Argentina now vs. when he was president is about 8-9 times more expensive in dollars to live here.

You could go to Don Julio and eat for $15 for dinner. Now that same meal would be $100 dollars. People would have a living wage and people could pay their bills on time. Now 40% of the buildings pay their condo fees late because they can't make ends meat and pay their bills.

Back then most people made about $500 dollars a month even though minimum wages were about $175 a month and they could live well on that. Utility bills like electricity and water were very low. Monthly expenses were about $30 per month on the typical apartment in Palermo. Now it is about $275 dollars.

For locals to have the same quality of life vs. then you have to be making 10x more in dollars. Back then no one could get credit cards. Now banks are having to give credit cards so people can pay their bills. This is not going to end up well. Why do people think things are different this time?

Prices have gone up even since I moved here last year. But is it really fair to compare to how things were 20 YEARS ago??

Prices everywhere have skyrocketed since 20 years ago. Isn't what got Argentina in this mess because of these unsustainable things like subsidized utilities?

 

[CraigM]

People can say what they want about the Kirchner's but life was much better here for almost everyone. Both expats and locals alike. The best president in Argentina was Nestor Kirchner. Everyone lived well. Argentina now vs. when he was president is about 8-9 times more expensive in dollars to live here.

You could go to Don Julio and eat for $15 for dinner. Now that same meal would be $100 dollars. People would have a living wage and people could pay their bills on time. Now 40% of the buildings pay their condo fees late because they can't make ends meat and pay their bills.

Back then most people made about $500 dollars a month even though minimum wages were about $175 a month and they could live well on that. Utility bills like electricity and water were very low. Monthly expenses were about $30 per month on the typical apartment in Palermo. Now it is about $275 dollars.

For locals to have the same quality of life vs. then you have to be making 10x more in dollars. Back then no one could get credit cards. Now banks are having to give credit cards so people can pay their bills. This is not going to end up well. Why do people think things are different this time?

I hear you Larry but of course it's going to feel good while you're outspending your means for decades on end. Argentina ran up a tab with every lender in sight until they ran out of rope and the bill came due. This hangover is going to last awhile and I doubt the era you described is ever coming back.

 

[Johnny]

I hear you Larry but of course it's going to feel good while you're outspending your means for decades on end. Argentina ran up a tab with every lender in sight until they ran out of rope and the bill came due. This hangover is going to last awhile and I doubt the era you described is ever coming back.

That is what my sense was visiting Buenos Aires the first time in November 2023. I could sense the wealth from the turn of the century, especially walking around Recoleta and Retiro. I'm sure things weren't cheap then either and I met a lot of people that told me that things were also expensive in the $1 to 1 peso days. My sense was things were too cheap while I was there. With Milei winning and then getting their house in order and getting things to realistic prices with utilities I don't think that those cheap days are ever coming back. There may be some correction with the exchange rate but doubt they will get that cheap again.

I am not sure what the value of the dollar will ultimately be. I guess we will know once the currency controls end. Utility prices were not realistic. They have raised rates and doubt they will subsidize them again unless the left comes back to power but even then I am not sure they will undo what has been already raised.

 

[Jenn]

I hear you Larry but of course it's going to feel good while you're outspending your means for decades on end. Argentina ran up a tab with every lender in sight until they ran out of rope and the bill came due. This hangover is going to last awhile and I doubt the era you described is ever coming back.

From what I understand the government was giving everything away free. Electricity, water, gas, transportation. I guess the reason why prices have gone up is because prices are going to reality on these things.

I am not sure what the value of the dollar will ultimately be. I guess we will know once the currency controls end. Utility prices were not realistic. They have raised rates and doubt they will subsidize them again unless the left comes back to power but even then I am not sure they will undo what has been already raised.

It sounds like at least until the elections in a few years but if the Peronists come back into power wouldn't they just undo all of these things? I don't know anything about Argentina. But it sounds like if Milei lost and power shifted back they could undo all of this?

 

[Betsy Ross]

I am not sure what the value of the dollar will ultimately be. I guess we will know once the currency controls end. Utility prices were not realistic. They have raised rates and doubt they will subsidize them again unless the left comes back to power but even then I am not sure they will undo what has been already raised.

I hear you Larry but of course it's going to feel good while you're outspending your means for decades on end. Argentina ran up a tab with every lender in sight until they ran out of rope and the bill came due. This hangover is going to last awhile and I doubt the era you described is ever coming back.

I also don't think it will ever get that cheap again. You have to look at the numbers. Milei raised prices considerably and he still has about 55% approval ratings so that means people knew things were not realistic and had to be finally fixed.

I do think the dollar can get a little stronger. Most economists here are saying the peso is overvalued but most are saying it's only 20% to 30% overvalued. I don't believe we will ever see the bargain basement prices again.

Sorry Larry I think that if you're expecting prices to go back to those days you're going to be disappointed. Many expats expecting those cheap prices will be disappointed if they think they will return anytime soon.

From what I understand the government was giving everything away free. Electricity, water, gas, transportation. I guess the reason why prices have gone up is because prices are going to reality on these things.


It sounds like at least until the elections in a few years but if the Peronists come back into power wouldn't they just undo all of these things? I don't know anything about Argentina. But it sounds like if Milei lost and power shifted back they could undo all of this?

Sure anything is possible in Argentina but people still support what the government is doing. They don't want to see surges followed by crashes. I do feel like the peso is too strong but I don't know how much or when it will come down. I would love to see the government ending the cepo but they already said it won't be until after the elections.

 

[James Bond]

I hear you Larry but of course it's going to feel good while you're outspending your means for decades on end. Argentina ran up a tab with every lender in sight until they ran out of rope and the bill came due. This hangover is going to last awhile and I doubt the era you described is ever coming back.

Reality is that Argentina had artificially low and unsustainable prides under Peronist presidents for decades. The bargain basement prices we had in Argentina were not sustainable. Everyone is paying the price now and a big % of the population realize that Argentina has to correct on prices. Prices are probably overshooting what they should be which is not sustainable if it stays this way for a long period of time.

@CraigM is correct. Prices will never go back down to how low they were probably ever again. It is painful Larry no question about it. The government has to be careful with this artificially high peso. Prices needed to correct but my guess was that prices wouldn't be that low again. If you already own a property you can manage because even though expenses have gone up they are still cheap. I don't know what expenses are in the United States but I am guessing they are much higher than in Buenos Aires.

I figured prices were going way up as salaries are going up. I don't think you comparing what you paid 20 years ago for anything is really credible Larry.

 

[Bharat]

Reality is that Argentina had artificially low and unsustainable prides under Peronist presidents for decades. The bargain basement prices we had in Argentina were not sustainable. Everyone is paying the price now and a big % of the population realize that Argentina has to correct on prices. Prices are probably overshooting what they should be which is not sustainable if it stays this way for a long period of time.

@CraigM is correct. Prices will never go back down to how low they were probably ever again. It is painful Larry no question about it. The government has to be careful with this artificially high peso. Prices needed to correct but my guess was that prices wouldn't be that low again. If you already own a property you can manage because even though expenses have gone up they are still cheap. I don't know what expenses are in the United States but I am guessing they are much higher than in Buenos Aires.

I figured prices were going way up as salaries are going up. I don't think you comparing what you paid 20 years ago for anything is really credible Larry.

I get that prices were unsustainable low but the prices on some things are so much more than neighboring countries. I just traveled in Brazil and prices are much lower than Argentina. I went to Colombia and Peru and also much lower. People on this board seem to be comparing things to the States and then saying it isn't much compared to the U.S. But is that a fair comparison?

Argentina is a developing country. You can't compare it to a first world country like States. I find it troubling people comparing things to how expensive the States are and justifying it is ok to charge that in Argentina. Salaries here are still very low. I think you make a fair point JamesBond that they were unsustainably low and needed to overshoot up but how long is too long??

I am going to some restaurants in Palermo and the prices are as much as I would spend in developed first world countries which Argentina is not.

 

[lemonade]

Does anyone know how prices compared before when the peso was 1 to $1? Was anyone here back then? How do the prices compare now vs. then? For example how much was a coffee back then?

 

[oil rush]

Does anyone know how prices compared before when the peso was 1 to $1? Was anyone here back then? How do the prices compare now vs. then? For example how much was a coffee back then?

It was expensive back then. Dollar was on par with the peso. I was here in the late 90's and I don't remember a coffee more than $1.50 which was quite a bit back then. In inflation adjusted dollars that would be about $2.75 dollars so quite pricey but it is more expensive today. Some places have coffee for $4 or even $5 dollar. At Starbucks some coffee drinks are 7,500 to 8,000 pesos.

 

[daveholman]

I get that prices were unsustainable low but the prices on some things are so much more than neighboring countries. I just traveled in Brazil and prices are much lower than Argentina. I went to Colombia and Peru and also much lower. People on this board seem to be comparing things to the States and then saying it isn't much compared to the U.S. But is that a fair comparison?

Argentina is a developing country. You can't compare it to a first world country like States. I find it troubling people comparing things to how expensive the States are and justifying it is ok to charge that in Argentina. Salaries here are still very low. I think you make a fair point JamesBond that they were unsustainably low and needed to overshoot up but how long is too long??

I am going to some restaurants in Palermo and the prices are as much as I would spend in developed first world countries which Argentina is not.

The reason we compare to US prices is most of us earn in US dollars, and our alternative to living here is living there.

 

[Larry]

I hear you Larry but of course it's going to feel good while you're outspending your means for decades on end. Argentina ran up a tab with every lender in sight until they ran out of rope and the bill came due. This hangover is going to last awhile and I doubt the era you described is ever coming back.

I understand Craig that prices were too cheap before but now they are too dear. Look at the typical wage. How do you justify prices can be this high?

Does anyone know how prices compared before when the peso was 1 to $1? Was anyone here back then? How do the prices compare now vs. then? For example how much was a coffee back then?

Nothing compared to today! I came to visit back then. It was nothing like now. Maybe a coffee was $1 back then maximum.

 

[Avocado]

The reason we compare to US prices is most of us earn in US dollars, and our alternative to living here is living there.

I understand expats comparing things but imagine us locals that make in pesos! I don't understand how Milei say we not expensive in dollars. Prices are not reasonable at these prices in dollars OR pesos!

 

[import export]

It was expensive back then. Dollar was on par with the peso. I was here in the late 90's and I don't remember a coffee more than $1.50 which was quite a bit back then. In inflation adjusted dollars that would be about $2.75 dollars so quite pricey but it is more expensive today. Some places have coffee for $4 or even $5 dollar. At Starbucks some coffee drinks are 7,500 to 8,000 pesos.

I have been doing business and coming to Argentina for the past 30+ years. Seen a lot of ups and downs. It was also expensive like this in late 2017 and part of 2018. Seemed like there was a wash of money. A few people in my office bought properties then and the prices were not cheap.

Back in the Menem days things were not cheap but nothing like today. I am just going from memory but IIRC @oil rush is correct. A cortado was about $1.50. Beef prices were very reasonable unlike today's prices. Still reasonable if you compare it to a metric like how much it cost in the US or Europe but not for local standards. There is a reason why beef consumption is at a 100 year low. No one can afford it.

The thing that worries me is loss of tourism and non competitive exports. This has not ended well the last times we had this situation. It lasted for a few years but then crashed.

 

[oil rush]

The reason we compare to US prices is most of us earn in US dollars, and our alternative to living here is living there.

What is your general sense @daveholman on relative pricing on stuff as someone that just got here? I couldn't tell if you have been here before from reading your posts. You seem well versed on Argentina but have you been here before? It is good to get feet on the ground reports from people that aren't set one way or another for any political party or jaded on past prices.

I have been doing business and coming to Argentina for the past 30+ years. Seen a lot of ups and downs. It was also expensive like this in late 2017 and part of 2018. Seemed like there was a wash of money. A few people in my office bought properties then and the prices were not cheap.

Back in the Menem days things were not cheap but nothing like today. I am just going from memory but IIRC @oil rush is correct. A cortado was about $1.50. Beef prices were very reasonable unlike today's prices. Still reasonable if you compare it to a metric like how much it cost in the US or Europe but not for local standards. There is a reason why beef consumption is at a 100 year low. No one can afford it.

The thing that worries me is loss of tourism and non competitive exports. This has not ended well the last times we had this situation. It lasted for a few years but then crashed.

Expats always are coming and going. Newtimers come in when it is cheap and think that is normal. Exacdtly correct it got expensive in 2017-2018. I don't think it was this bad but it was up there.

I think the worry about tourism is valid. I was just in Buenos Aires last weekend and I noticed it very slow. I come this time every year to visit my lady friend. Even local foot traffic in restaurants and cafes is down. My lady friend has a cousin that owns a bar and she said that business is down tremendously. She said that she may have to close and other popular bars are closing due to getting squeezed on margins of rent, utilities and monthly expenses all going up. Salaries too.

 

[earlyretirement]

Does anyone know how prices compared before when the peso was 1 to $1? Was anyone here back then? How do the prices compare now vs. then? For example how much was a coffee back then?

My first trip was right before the corralito. I was in BA during that all happening and it was interesting to see the dynamic of being one of the most expensive cities in the world to becoming the cheapest overnight. During the $1 USD : 1 peso days it was expensive here. You have to remember there wasn't much tourism in Argentina compared to now during the 1:1 days. It was cheaper to go to Paris then come to Argentina. The dollar was stronger than the Euro too.

What is your general sense @daveholman on relative pricing on stuff as someone that just got here? I couldn't tell if you have been here before from reading your posts. You seem well versed on Argentina but have you been here before? It is good to get feet on the ground reports from people that aren't set one way or another for any political party or jaded on past prices.


Expats always are coming and going. Newtimers come in when it is cheap and think that is normal. Exacdtly correct it got expensive in 2017-2018. I don't think it was this bad but it was up there.

I think the worry about tourism is valid. I was just in Buenos Aires last weekend and I noticed it very slow. I come this time every year to visit my lady friend. Even local foot traffic in restaurants and cafes is down. My lady friend has a cousin that owns a bar and she said that business is down tremendously. She said that she may have to close and other popular bars are closing due to getting squeezed on margins of rent, utilities and monthly expenses all going up. Salaries too.

This is correct. 2017 during Macri got very expensive. In fact, real estate prices were soaring then. It's when I sold 10+ of my personal properties in Buenos Aires. I kept only 2 but I figured it was a good time to exit. I also sold over 100+ properties for my clients at the high. There was also a tax amnesty and billions came in and mortgages also started up again which pushed property prices up.

It was expensive but I don't think it was as expensive as now in USD or pesos.

What is your general sense @daveholman on relative pricing on stuff as someone that just got here? I couldn't tell if you have been here before from reading your posts. You seem well versed on Argentina but have you been here before? It is good to get feet on the ground reports from people that aren't set one way or another for any political party or jaded on past prices.


Expats always are coming and going. Newtimers come in when it is cheap and think that is normal. Exacdtly correct it got expensive in 2017-2018. I don't think it was this bad but it was up there.

I think the worry about tourism is valid. I was just in Buenos Aires last weekend and I noticed it very slow. I come this time every year to visit my lady friend. Even local foot traffic in restaurants and cafes is down. My lady friend has a cousin that owns a bar and she said that business is down tremendously. She said that she may have to close and other popular bars are closing due to getting squeezed on margins of rent, utilities and monthly expenses all going up. Salaries too.

Valid concerns about tourism. My best-case guess is it's down at least 30% from last year. We are seeing far fewer tourists from the USA and Europe. Also Brazilians that were flocking here last year have mostly stopped as Buenos Aires is very expensive now for them. Expats come and go. I have seen the cycles of people that come here when it's cheap and people that leave when it gets expensive for 23 years now. It's so predictable. The issue is that many brokemads - digital nomads are always chasing the most inexpensive places. One thing you have to keep in mind is that there isn't really many cities in Latin America that can compare with the lifestyle, culture, cultural events, sporting events and beauty of the city vs. Buenos Aires. And if you want a slower pace of life there are tons of other cities around Argentina that are more quiet, slower paced and more affordable than Buenos Aires. But for me I love the big city of BA.

Tourism will come back. There are still people coming here and that won't stop. What you will find is that the people coming down will be more affluent, older, and have more disposable income vs. younger digital nomads who are mostly broke.

Buenos Aires historically was NOT a cheap city. We get periodic periods where it gets very cheap which is not healthy. I agree it's not healthy to have artificially inflated prices either. Prices have to find a fair equilibrium and we'll know what that is after the CEPO (currency controls) end and the peso is floating freely without any government intervention.

My best advice is to enjoy Buenos Aires whether it is cheap or expensive. If it's too expensive then leave for other areas where it is more affordable. Plenty of options around the world.

I recently went down for several weeks and what I noticed is the plane going to EZE was more than half empty and it's usually full. I checked the flights a few days before and a few days after and they were all the same. And at the airport going back home it was mostly older senior citizens. They were well dressed and looked to have money. These kind of people will keep coming back to Argentina.

 

[Nasdaq]

The reason we compare to US prices is most of us earn in US dollars, and our alternative to living here is living there.

Exactly. It is natural that we will compare prices in dollars since most of us here probably have our savings or earnings in dollars. It looks like some on here are from the EU or the UK so they probably have different but even my friends from the UK save in USD. Everytime I want to complain I think about my friends that are local here and keep my mouth shut and feel fortunate I have dollar savings.

Everyone is making fair arguments. Everyone is complaining about prices here in BA. I just got a good email from @Argentina Expat. I laughed at the opening of the email. It said A famous economists one said that there are only 4 types on countries in the world: developed countries, developing countries, Japan, and Argentina.
Seems like he was 100% on point.

How else can you explain that the country has become expensive for everyone - locals, expats, tourists, businesses - while still having the fastest economic growth in the last 3 years?

Unique country indeed.

It is true. It was expensive in 2017 but I don't remember prices ever being THIS expensive. But I am guessing the peso might devalue a little but it is hard to tell. Governments can manipulate currencies for long periods of time.

Argentina: A country that has become expensive for everyone, from locals to tourists and businesses

The peso rose sharply against the dollar in 2024, causing a significant drop in tourism. The government maintains it will not devalue the currency.

www.lemonde.fr