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Argentina: Cost of Living

2017-08-27
by GoinGlobal

Endowed with rich natural resources, Argentina benefits from a highly educated workforce, a globally competitive agricultural sector and a diversified industrial base. With a population of more than 43 million people, it is the fourth most populous country in Latin America. With a gross domestic product (GDP) of 879.4 billion USD, Argentina has the second-largest economy in South America and the third-largest economy in Latin America overall.

After the acute collapse that Argentina’s economy suffered in 2001-2002, the country has been recovering slowly with alternating periods of rapid expansion followed by economic slowdowns over the last decade.
 
Following years of economic protectionism during the administrations of the late Néstor Kirchner, and his wife Cristina Fernández de Kirchner, the new government of President Mauricio Macri has implemented several reforms to liberalize the country’s economy.
 
While his administration lifted capital controls, floated the national currency (the peso or ARS), negotiated debt payments with holdout bond creditors and removed export controls on some commodities, inflation has skyrocketed in 18 months, reaching more than 25 percent. 

  • Fluctuating prices are causing average salaries to be insufficient for many workers.
  • Difficult economic conditions have generated several social protests against President Macri’s measures, such as a general strike that recently paralyzed the country.
  • President Macri maintains that his administration’s reforms aim at promoting fundamental changes in the long term.
  • The government confirms that inflation is one of the central elements to fight against in order to make Argentina more competitive.
  • Corruption and high fiscal pressure are key bottlenecks for the attraction of investors to the country, according to the latest World Economic Forum report. 

In Mercer’s latest Cost of Living City Rankings, Buenos Aires ranks 41st out of 209 cities around the world. This position, up from 86th place in previous surveys, makes the Argentine capital Latin America’s most expensive city for the second consecutive year. Such a fast increase in Argentina’s cost of living is mainly being caused by the high inflation rate and the new government’s neoliberal economic measures, which are leading internal consumer prices to rise dramatically month after month. 

Average Prices 

Argentina’s inflation rate is still extremely high – at around 25 percent, according to the latest report by the International Monetary Fund. 

  • Argentina now registers the third-highest inflation rate in the world, just after Venezuela and Angola.>
  • General prices grew by 40 percent last year.
  • Experts foresee that inflation will get down to approximately 21 percent at the end of this year.
  • In the city of Buenos Aires, the cost of the basic food basket increased by 35.6 percent over the last 12 months, according to the Latin American Economic Research Foundation.
  • The basic items that are registering the highest monthly cost increase are fresh fruits and vegetables, cleaning and hygiene products, dairy products and meats. 

When the cost of living is compared to the US or Europe, Argentina’s average prices are generally cheaper, especially for food, local beverages and public transport. However, imported products, as well as clothing and electronics, are more expensive. Prices in the interior of the country are sometimes lower than in Buenos Aires, and the cost of living depends greatly on one’s lifestyle. It is also helpful to speak Spanish with local merchants in order to obtain the regular price (as opposed to the ‘tourist price’).
 
Typical Prices in Argentina’s Main Cities (in ARS)* 

Good/Service Buenos Aires Cordoba Rosario
Groceries      
Potatoes, 1 kilogram (2 pounds) 18 10 17
Domestic beer, 0.5-liter supermarket 31 18 22
Table wine, 1 bottle good quality >107 80 88
Toilet paper, 4 rolls 49 26 29
Toothpaste 49 25 30
Dining out/entertainment      
Good-quality restaurant lunch meal 156 96 135
Fast-food combo meal 136 125 120
Dinner for two at a local pub 478 400 757
Pair of movie tickets 250 204 196
IPod Nano 16 GB 4,593 3,623 2,924
Clothing      
1 pair brand-name jeans 1,776 1,577 1,105
1 dress from a chain store 1,127 1,077 1,084
Services/fees      
Internet service (monthly) 598 468 643
1 liter (0.25 gallon) of fuel 20 20 20
1-month gym membership 900 440 729

Source: Expatistan
 
*Please note that prices fluctuate constantly in Argentina due to rampant inflation.

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