Freddo Ice Cream – $257 Pesos A Kilo!

If you thought inflation in Argentina was bad, check out the price of a kilo of Freddo in Punta del Este:

freddo punta del este Freddo Ice Cream   $257 Pesos A Kilo!

Yes, that’s UYU $500, but that works out to U$S 22 or $257 Argentine pesos! (And yes, this Freddo is inside the Conrad Punta del Este where everything is super expensive.)

It’s pretty easy to see why there’s less and less Argentines vacationing in Punta del Este – it’s way too expensive compared to vacationing on the Argentine coast. In fact, I would guess that at least 80% of the guests at the Conrad were Brazilian. We heard a ton more Portuguese than Spanish.

So, now that we’re out of Hilton points (and not going to actually pay U$S 500/night for the Conrad), I think this will be our last trip to Punta for some time. I’d much prefer vacationing in Cariló where it’s just as nice and everything is at least half the price.

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Time To Lock Up The Cheese

File this one under “Only in Argentina.”

Looks like with all the inflation in Buenos Aires, shredded cheese (queso rallado) has hit $70 pesos a bag and this grocery store is worried about it being stolen – bags of shredded cheese have had security tags installed on them.

cheese prices argentina Time To Lock Up The CheeseI’m not quite sure what’s to prevent someone from tearing these tags off though – it is just a foil bag, right?

- Hat tip to /r/argentina

 

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Loss of Purchasing Power in Argentina – Pesos and Dollars Affected

Argentina allowed the peso to devalue by 17% on January 23, 2014, from $6.8 to over $8.0. Immediately, many merchants started raising their prices. The government decried these tactics as unwarranted and pushed to keep prices down. But, aside from the prices of staple foods which were frozen in advance of this, prices on most other goods have risen. Imported items have been especially affected as many foreign suppliers increased prices.

Here’s a personal example – We bought two imported Avent baby products from MercadoLibre on January 19, 2014:

  • Avent Bottle Sterilizer – $899
  • Avent Bottle Warmer – $599

At the dollar blue price at the time ($11.60), that worked out to U$S 77.50 and U$S 51.64 respectively. (For comparison, the bottle sterilizer from Amazon is $52.72 and the bottle warmer is U$S 29.51. So, we paid a bit of a premium, but not too bad for Argentina.)

Had we waited a few days longer to buy those items, we would have paid:

bottle sterilizer argentina 300x240 Loss of Purchasing Power in Argentina   Pesos and Dollars AffectedThat’s a 55.84% and 21.04% increase in the peso cost! And, as the gap between the official rate and the blue rate has also been reduced (it’s only at $12.00), the dollar prices have also increased significantly – U$S 116.75 and U$S 60.42. That’s a 50.65% and 8.78% increase and now puts them at more than double Amazon’s prices!

So, even though the peso only devalued by 17%, we’re seeing price increases of 21% and 56%. That’s crazy. In addition, even holding dollars is not enough to maintain your purchasing power as the dollar blue rate has not kept up.

Here’s one of my favorite examples of the price increases from a Reddit user: the price of the Samsung Galaxy S4 at Garbarino went from $7,999 pesos to $11,518 pesos – in 6 hours! (on January 23, 2014)

argentina samsung galaxy price increase Loss of Purchasing Power in Argentina   Pesos and Dollars Affected

Consumer purchasing power has been dramatically reduced and salaries have not been increased. Inflation is on track to hit more than 30% this year and at the moment, there’s no end in sight as the government’s foreign currency reserves continue to dwindle.

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