Argentines scrimp as inflation tops 140%

Shrinking wallets due to hyperinflation have forced many Argentines to stop buying new clothes and even sell off their clothes to make ends meet.

While the rest of the world is slowly getting inflation under control after the pandemic, Argentina is going in the opposite direction. Inflation here hit 142.7% in October, according to the Argentine statistics agency on November 13. Compared to the previous month, inflation was more than 8%.

"Now you can't go to the mall and buy what you want like before. The prices are unbelievable," Aylen Chiclana, a 22-year-old student in Buenos Aires, told Reuters.

A new pair of jeans here now sells for double what it did last year and is equivalent to more than a third of the Argentine minimum monthly wage.

Argentines in a second-hand clothing store in Buenos Aires. Photo: Reuters — Argentines in a second-hand clothing store in Buenos Aires. Photo: *Reuters*

For years, Argentines have been struggling with high inflation, which economists blame on printing money and a loss of confidence in the peso. Inflation accelerated last year, reaching its highest level since 1991, when the country emerged from hyperinflation.

South America's second largest economy is facing its worst crisis in decades. 20% of Argentina's population lives in poverty. The risk of recession is shaking up the upcoming presidential election here.

Public anger has pushed candidate Javier Milei ahead of Economy Minister Sergio Massa in the presidential race, who is seen as having failed in his fight against inflation.

Milei, whose style is reminiscent of former US President Donald Trump, blames Argentina's leaders for plunging the country into successive crises. Milei believes replacing the peso with the US dollar could cool inflation.

Beatriz Lauricio, a 62-year-old retired teacher, said she and her husband often go to a clothing market on weekends to sell their old clothes and make ends meet. “We are middle class, lower middle class to be exact. We have jobs, but we still have to go to the market,” she said. Her husband works for a bus company.

Last weekend, when the market was cancelled due to bad weather, the couple's finances "collapsed". "We don't do this to have money to travel , but to survive," she said.

María Silvina Perasso, who organizes the fair in Tigre, a suburb of Buenos Aires, says many people come here to buy because prices are rising faster than wages. The minimum monthly wage here is 132,000 pesos. That’s equivalent to $377 at the official exchange rate, but half that on the black market.

"Here, they buy clothes for only 5-10% of the price in the store. So they can buy more things for their family," she said.

Argentina’s inflation has the same causes as the rest of the world: the war in Ukraine, supply chain tensions and soaring government spending. But many economists say the problem lies within the country itself.

The country is spending more than it earns. Health care, education, energy, and public services are heavily subsidized or free. So to make up for the shortfall, they are printing more pesos. By 2022, the country’s Economy Minister, Sergio Massa, has pledged not to ask the central bank to print more money to finance public spending.

According to a survey released by the Central Bank of Argentina on November 13, economists forecast that inflation in Argentina will reach 185% by the end of this year, higher than the previous forecast of 180%. GDP is expected to shrink 2% this year and 1.6% in 2024.

María Teresa Ortiz, 68, lives off her pension and sewing, earning 400 pesos ($1) an hour. She goes to the market to buy clothes because she can't buy them anywhere else.

"We can't buy new things, from sneakers, flip-flops, jeans, T-shirts or shirts. So you have to go to the market to buy them," she explained.

Ha Thu (according to Reuters)

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