Over the past two weeks, the owner of a trendy wine bar in Buenos Aires has seen the price of beef rise 73%, while the courgettes he puts in salads have increased 140%. An Uber driver paid 60% more to fill up the tank. And one father said he spent double on nappies for his baby compared to last month.
In Argentina, a country synonymous with runaway inflation, people are used to paying more for practically everything. But under the country’s new president, life is quickly 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 year before.
But since Milei took office on Dec. 10 and rapidly devalued Argentina’s currency, prices have risen at such a dizzying pace that many in this South American country of 46 million people are running new calculations on how their businesses or families they will be able to survive until then. the deepest economic crisis that the country is already going through.
“Ever since Milei won, we have always been worried,” said Fernando González Galli, 36, a philosophy teacher at a high school in Buenos Aires.
Mr Galli has tried to cut back without worsening the lives of his two daughters, who are 6 years and 18 months old, by switching to a cheaper brand of nappies and rushing to spend his Argentine pesos before their value disintegrates further. “As soon as I get my salary, I go and buy everything I can,” he 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 it went well beyond what he expected. He was used.
Since Mr. Milei won, the price of the premium steak that Mr. Carbajo serves has risen 73%, to 14,580 pesos, or about $18 a kilogram, about 2.2 pounds; a five-kilogram box of courgettes rose from 6,500 to 15,600 pesos; and avocados are 51% more expensive than they were earlier this month.
“There’s no way people’s salaries or incomes will adapt at this rate,” Carbajo said.
Milei’s spokesman, Manuel Adorni, said the acceleration of inflation was the inevitable consequence of a final adjustment of Argentina’s distorted economy.
“We are left with a multitude of problems and unresolved issues that we need to start addressing,” he said. “We will inevitably go through months of high inflation.”
Milei warned Argentines that his plans to shrink the government and reshape the economy would initially be harmful. “I would rather tell you the inconvenient truth than a convenient lie,” she said in her inaugural speech, adding last week that he wanted to end the country’s “pattern of decline.”
Argentina’s economy has been mired in crisis for years, with chronic inflation, growing poverty and a currency that has lost 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 railing against what he called corrupt politicians who had destroyed the economy, often for personal gain.
During the campaign, he promised to adopt a chainsaw for government spending and regulations, even brandishing a real chainsaw at demonstrations.
After Milei’s victory, price increases began to accelerate in anticipation of his new policies.
The previous left-wing government had used complicated currency 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.
Mr Milei promised to reverse all this and wasted little time.
Two days after taking office, Milei began cutting government spending, including consumer subsidies. It also devalued the peso by 54%, bringing the government’s exchange rate closer to the market’s valuation of the peso.
Economists said such measures were necessary to solve Argentina’s long-term financial problems. But they also brought short-term pain in the form of even faster inflation. Some analysts have questioned the lack of adequate safety nets for poorer Argentines.
In November, prices rose 13% compared to October, according to government data. Analysts expect prices to rise another 25-30% this month. And some economists are predicting an 80% jump between now and February, according to Santiago Manoukian, chief economist at Ecolatina, an economic consulting firm.
The forecasts are partly caused by the surge in gas prices, which increased 60% from December 7 to December 13, and have a ripple effect on the economy.
Currency devaluation has made imported products such as coffee, electronics and gas instantly more expensive because their prices are expressed in US dollars. For example, a monthly subscription to Netflix in Argentina increased 60% to 6,676 pesos, or $8.30, the day after the devaluation. It has also prompted some domestic producers, including farmers and livestock ranchers, to raise prices to bring them in line with their own rising costs.
With inflation chronically high, unions often negotiate large raises to try to keep up, but those wage increases are quickly eaten up by sharp price increases. Even informal workers, a list that includes nannies and street vendors, and who make up nearly half the economy, don’t get such raises.
Milei launched his next big steps to reshape government and the economy on Wednesday with an emergency decree that significantly reduces the state’s role in the economy and eliminates a number of regulations.
The measure prohibits the state from regulating the rental real estate market and from setting limits on the commissions that banks and health insurers can charge customers; changes labor laws to make it easier to fire workers while also placing limits on strikes; and transforms state-owned enterprises into joint-stock companies 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 across Buenos Aires, such as pensioner Jesusa Orfelia Peralta, 73, took to the streets banging on pots to show their displeasure.
She feared that rising prices would make health care too expensive for her and her husband. Despite severe spinal problems, she said she did not hesitate to go out, using a walker, and vent her anger in public. “Where else should I be?” she said.
Milei has tried to discourage protests by threatening to cancel welfare plans and fine anyone involved in demonstrations blocking roads. Human rights groups have widely criticized such policies as limiting the right to protest peacefully.
For now, most Argentines are trying to figure out how to make ends meet in what often feels like both a complicated economics course and a frantic sprint to buy before prices rise again.
“I always say we’re at university and every day we take a difficult exam, every five minutes,” said Roberto Nicolás Ormeño, owner of El Gauchito, a small empanadas shop in downtown Buenos Aires.
Mr. Ormeño said he was scouring the market for his ingredients and changing suppliers almost every week because they raised prices too much or provided lower-quality products.
It is trying to avoid passing on too many price increases to customers, although it is not sure how long it can sustain this. “I see my regular customers buying a dozen instead of two” dozen empanadas, he said.
Marisol del Valle Cardozo, who has a 3-year-old daughter, has cut costs in an effort 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 have reduced our weekend schedules from four times a month to just once.”
Ms. Cardozo, who works for a police department outside Buenos Aires, said she got a raise this year, but that it wasn’t enough. She also drives an Uber, but she said fare increases have not kept pace with soaring gas prices.
Despite the challenges, Ms. Cardozo said she remained a supporter of Milei and hoped his policies would work.
“We were living in a fantasy,” he said, referring to gas prices before the recent increase. “If these adjustments are ultimately necessary to thrive, it is worth it.”
Jack Nicas contributed reporting from Rio de Janeiro.