by In the past two weeks, the owner of a trendy wine bar in Buenos Aires has seen the price of beef soar 73 percent, while the zucchini he puts in his salads rise 140 percent. An Uber driver paid 60 percent more to fill her tank. And one dad said he spent twice as much on diapers for his little one 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 becoming even more painful.
When Javier Milei was elected president on November 19, the country was already suffering from the third-highest inflation rate in the world, with prices rising 160 percent from the previous year.
But since Milei took office on Dec. 10 and rapidly devalued Argentina’s currency, prices have soared at such a dizzying pace that many in this South American country of 46 million people are making new calculations about how their businesses or homes can afford survive the distant crisis. deepest economic crisis that the country is already suffering.
“Since Milei won we have been worried all the time,” said Fernando González Galli, 36, a high school philosophy teacher in Buenos Aires.
Galli has been trying to cut expenses without making life worse for her two daughters, who are 6 years and 18 months old, including switching to a cheaper brand of diapers and rushing to spend her Argentine pesos before their value decays further. “As soon as I get my paycheck, I’m going to buy everything I can,” she said.
Nahuel Carbajo, 37, owner of Naranjo Bar, a trendy wine bar in Buenos Aires, said that, like most Argentines, he had become accustomed to regular price increases, but last week he went much further. than what he was used to.
Since Milei won, the price of the premium steak Carbajo serves has shot up 73 percent, to 14,580 pesos, or about $18, per kilogram, about 2.2 pounds; a five-kilogram box of zucchini rose from 6,500 to 15,600 pesos; and avocados cost 51 percent more than they did earlier this month.
“There is no way for people’s salaries or incomes to adapt to that speed,” Carbajo said.
Milei spokesman Manuel Adorni said accelerating inflation was the inevitable consequence of finally fixing Argentina’s distorted economy.
“We have been left with a multitude of unresolved problems and issues that we have to begin to address,” he said. “Inevitably, we will go through months of high inflation.”
Milei has warned Argentines that his plans to reduce the government and remake the economy will hurt at first. “I prefer to tell you the inconvenient truth rather than a comfortable lie,” she said in her inaugural address, adding last week that she wanted to end the country’s “model of decadence.”
Argentina’s economy has been mired in crisis for years, with chronic inflation, rising poverty and a currency that has plummeted in value. The economic turmoil paved the way to the presidency for Milei, a political outsider who had spent years as an economist and television pundit criticizing what he called corrupt politicians who destroyed the economy, often for personal gain.
During the campaign, he promised to take a chainsaw to public spending and regulations, even wielding an actual chainsaw at rallies.
After Milei’s victory, price increases began to accelerate in anticipation of his new policies.
The previous leftist government had used complicated exchange controls, consumer subsidies and other measures to inflate the official value of the peso and keep several key prices, including gas, transportation and electricity, artificially low.
Milei promised to undo all that and has wasted little time.
Two days after taking office, Milei began cutting public spending, including consumer subsidies. She also devalued the peso by 54 percent, bringing the government’s exchange rate much closer to the market valuation.
Economists said such measures were necessary to solve Argentina’s long-term financial problems. But they also caused short-term damage in the form of even faster inflation. Some analysts questioned the lack of adequate safety nets for the poorest Argentines.
In November, prices rose 13 percent from October, according to government data. Analysts predict prices will rise an additional 25 to 30 percent this month. And between now and February, some economists are predicting an 80 percent increase, according to Santiago Manoukian, chief economist at Ecolatina, an economic consulting firm.
The forecasts are partly due to rising gasoline prices, which rose 60 percent between Dec. 7 and Dec. 13 and have a trickle-down effect on the economy.
The currency devaluation immediately made imported products such as coffee, electronic devices and gas more expensive because their price is expressed in US dollars. A monthly subscription to Netflix in Argentina jumped 60 percent to 6,676 pesos, or $8.30, the day after the devaluation, for example. It also prompted some domestic producers, including farmers and ranchers, to raise prices to align with their own rising costs.
With chronically high inflation, unions often negotiate large raises to try to keep up, but those wage increases are quickly swallowed up by sharp price increases. Informal workers, a list that includes babysitters and street vendors, and who represent almost half of the economy, do not receive these increases either.
On Wednesday, Milei launched his next big steps to remake the government and the economy with an emergency decree that significantly reduces the state’s role in the economy and eliminates a series of regulations.
The measure prohibits the State from regulating the real estate rental market and establishing limits on the rates that banks and health insurers can charge clients; changes labor laws to make it easier to fire workers while putting limits on strikes; and turns state companies into corporations so they can be privatized.
Many legal analysts immediately questioned the constitutionality of the decree, saying that Milei was trying to subvert Congress.
After the speech, people from all over Buenos Aires, like Jesusa Orfelia Peralta, a 73-year-old retiree, took to the streets banging pots and pans to show their discontent.
She worried that price increases would make proper health care too expensive for her and her husband. Despite her severe spinal problems, she said she did not hesitate to go out, using a walker, and vent her anger in public. “Where else would she be?” she said.
Milei has tried to discourage protests by threatening to cancel welfare plans and fine anyone involved in demonstrations that block roads. Human rights groups have widely criticized these policies as restrictive of the right to peacefully protest.
For now, most Argentines are trying to figure out how to make ends meet in what often seems like a complicated course of economics and a frantic race to buy before prices rise again.
“I always say that we are in university and every day we take a difficult exam, every five minutes,” said Roberto Nicolás Ormeño, owner of El Gauchito, a small empanada shop in the center of Buenos Aires.
Ormeño said he had been scouring the market for his ingredients and changing suppliers almost every week, either because they raise prices too much or because they offer poorer quality products.
He is trying to avoid passing on too many price increases to customers, although he is not sure how long he can sustain it. “I see my regular customers buy a dozen instead of two” dozen empanadas, he said.
Marisol del Valle Cardozo, who has a 3-year-old daughter, has been cutting expenses to make ends meet, turning to cheaper brands and going out less. “We don’t turn on the air conditioning as much,” she said. “We reduced our weekend plans from four times a month to just once.”
Cardozo, who works for a police department on the outskirts of Buenos Aires, said he received a raise this year, but it is no longer enough. He also drives an Uber, but said fare increases had not kept pace with rising gas prices.
Despite the challenges, Cardozo said he continued to support Milei and hoped his policies would work.
“We were living under a fantasy,” he said, referring to gasoline prices before the recent increase. “If in the end these adjustments are necessary to prosper, they are worth it.”
Jack Nicas contributed reporting from Rio de Janeiro.
