BUENOS AIRES—Shop owner Jonathan Faez has some advice for people obsessed with inflation around the world: relax.
“I have friends in the United States and Spain, and they tell me they’re going crazy with their annual inflation at 5% or 7%,” says Mr. Faez, a lingerie store owner. “Here we reach 4% almost every month!”
Welcome to Argentina, where high, almost uncontrollable inflation – now at an estimated 55.1% last year – is as natural as the country’s succulent sirloins and sensuous tangos.
As the rest of the world experiences higher inflation — a by-product of supply chain crises, high stimulus spending and the war in Ukraine — Argentina offers those worried about how high inflation will rise and what it will mean for their everyday lives something like a window life.
You’ve got practice: in the late ’80s, galloping government spending pushed inflation past 3,000%, and after a period of relative stability, the figure rose again, hitting 6.7% in March alone, a 20-year high.
“Here, 40% is normal,” says Mr. Faez. “And when we get over 50%, it doesn’t scare us, it just bothers us.”
Shopkeeper Jonathan Faez says inflation doesn’t scare him.
Most Argentines have developed strategies to deal with rising prices and other features of the country’s economy, such as the falling value of the currency, the peso. It’s a bit like the old “Dr. Strangelove’ classic about nuclear war, with a twist: “How I Learned to Stop Worrying and Love Hyperinflationary Policies.”
Because money in a bank account depreciates quickly, Argentines use up their paychecks almost immediately after receiving them. A visit to the supermarket often yields weeks’ worth of groceries and supplies, from non-perishable items like shampoo and canned goods to frozen meats to be stocked in freezers. People try to exchange their pesos for US dollars, which offer protection against inflation. And they willingly apply for loans that will be easier to repay over time because of the weakening currency.
Yolanda Mastripólito, a 70-year-old lawyer, says one tactic she uses is to pay her taxes late — knowing that if she hesitates, she can foot the bill with less valuable money. And like other Argentines, she has learned that the government will not charge her interest on an overdue bill.
“You save a lot of money,” she explains.
Hoarding is a must. “I came to this market and bought as much toilet paper as I could for the month, more than 20 packs,” said Melanie Lichtensztejn, a 24-year-old university student, recently. And not only toilet paper – there was also cleaning products, bottled drinks, milk. “I try to buy everything I can because I know next month it’s going to cost more to buy,” she said.
At the fruit stand outside Buenos Aires where Sofía Finot works, she says her competitors are fighting inflation by adding water and ice to their smoothies. “It’s more water, less fruit!” She says, adding that she doesn’t resort to such tactics, instead relying on buying frozen fruit to stock up before prices go up. “They last a year,” she says.
A shopper buys basics in the Belgrano district.
In southern Argentina, butcher Exequiel García uses humor to lighten the mood, displaying hand-lettered signs outside the storefront with witty slogans like “Look at our prices and cry” and “Eat meat on Holy Week!” It’s not a sin.”
How bad was inflation?
According to policy group Argentine Institute of Fiscal Analysis, in March Russia ranked first in the world and Argentina second (Venezuela, which does not regularly release fiscal data but is estimated by economists to have an annual inflation rate of 251%, is not included in the estimates of the institute included).
The Once neighborhood on Corrientes Avenue.
A street scene in Buenos Aires where some workers are now being paid in cryptocurrency instead of the volatile peso.
As the peso falls and inflation rises, workers are increasingly getting paid and saving in cryptocurrency. “They prefer the volatile asset bitcoin over the peso, where they know they will always lose,” says Damian Di Pace of Focus Market Consultancy in Buenos Aires.
Argentines who haven’t yet caught the bitcoin bug are looking for other, often inventive, ways to stretch their ailing peso.
Raúl Ramos, 36, a construction worker, says he and his wife watch for sales at the huge Carrefour store, which they like.
“I come to Carrefour for 25-50% sales,” he says, explaining that at the start of the school year, everything from books to backpacks to notebooks was three times more expensive than last year. “I’m not doing this to save money. I do it so I have money at the end of the month. I’m used to fighting.”
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María Oyhanarte, 67, and her husband, Gustavo Pastrana, 68, say they search La Nación newspaper for special offers for seniors. “We rely on these specials,” says Ms. Oyhanarte. “We walk, we look and we make a big purchase once a week.”
She admits it’s a losing battle, explaining that high inflation has forced the couple to stop consuming some of the things they’ve bought in the past. “Meat, for example,” she says.
Mr Pastrana, who runs a cafe next to his wife’s bookshop, says he sees people come in and read all day and just have a coffee, although he diligently raises the prices. “I run a low-margin business,” he says.
Gustavo Pastrana and Maria Oyhanarte, featured in their bookstore, have given up eating meat.
Others in Argentina buy on installments—from groceries to clothing to household goods.
Cecilia Luna, 50, says her monthly income from working as a super in a building isn’t enough, so she buys what she needs in tiny payments spread over long periods of time. At the moment her family is building a small house in a poor community outside of Buenos Aires.
“We buy all the building materials in installments,” says Ms. Luna, pointing out that the material for the roof is paid out over 12 months without interest. In other cases, Argentines know that the interest on the payments is usually lower than inflation, so their money can go further.
“We’re experts in economics, so we can get to the end of the month,” says Ms. Luna. “That way we can stay calm and don’t have to borrow money.”
write to Juan Forero at [email protected]
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