As Inflation Skyrockets, Argentines Rely on Time-Tested Strategies

BUENOS AIRES, ARGENTINA — A few customers amble unenthused along the aisles of a supermarket in the neighborhood of Boedo. After reading the prices with resignation, they draw up to the line at the cash register with one or two products: a package of rice, a bottle of oil, a bag of milk. On the way home, their shopping bags flap in the wind, almost empty.

Prices in Argentina, which were already high — they’ve increased by at least 25% each year for more than a decade — shot up in December 2023, when President Javier Milei, a libertarian politician who promised to reduce taxes, cut public spending and eradicate corruption, took office. In December, inflation registered 25.5%, followed by 20.6% in January. It slowed significantly in February to 13.2%, but the accumulated inflation over the last three months still stands at 71.33%.

In his first month in office, Milei devalued the Argentine peso by 50% and repealed, by decree, the country’s Ley de Abastecimiento. The law allowed the government to control prices and regulate the number of exports, thus ensuring the domestic market’s supply. On March 14, the Argentine Senate voted to reject this decree. However, it will remain in force until the lower house of Congress, the Cámara de Diputados, also rejects it.

The measures had direct repercussions on prices, which has affected consumption. Retail sales fell 25.5% in February compared to the same month the previous year, according to Confederación Argentina de la Mediana Empresa, an association whose members include over 400,000 companies.

The situation is a far cry from the one people experienced days before the inauguration of the new president. At that time, families were emptying wholesale supermarket shelves, anticipating that prices would skyrocket. “I’m sorry I didn’t buy more,” says Cecilia Caputo, a teacher, looking over what remains of the food she has stored in her house.

Circumstances are demanding that many people, like Caputo, put their own strategies into practice in an effort to protect their purchasing power.

Stockpiling food

Some, like Rocío Suárez, who works at a soup kitchen, and Matías Ponce, who works in a faux leather factory, have tried stockpiling.

“We buy in bulk because we don’t know what’s going to happen,” says Suárez, a mother of five daughters. Ponce, her partner, says he expects that, as the new president announced, the first six months of his term will be bad.

“We don’t have enough, but hopefully with this president, it will get better. We have to have faith in him because if it goes badly for him, it’ll go badly for us, and we’ll be ruined by hunger,” Ponce says.

Buying more before the surges better enables you to endure the crisis, says Caputo, who has been practicing this strategy since August.

“In principle, it’s like peace of mind. It gives me a cushion, so I can continue consuming what I want for a while, and then I’ll see. Right now, I have around 7 liters [1.8 gallons] of olive oil,” Caputo says.

The inflation also got her thinking about how to invest her salary in such a way that it does not lose value between when she’s paid and when she is ready to spend it.

“This year, I had to start thinking about what I’m going to do with the money, whether [to invest it], buy [United States] dollars or go out and buy food. It’s taken time for me to think over the financial issues,” Caputo says.

Tomás Gulias, a sociologist, says Argentine society has ingrained in its popular knowledge a series of strategies that surface under circumstances like hyperinflation and major crises. They get passed on from generation to generation for times of significant economic instability, like this one.

“They are all practices that are deeply rooted in society, and they occur much more often due to the level of inequality the country has,” Gulias says.

Swapping

Another strategy on the rebound is swapping, in which products are exchanged without money. This became popular in Argentina after the economic crisis in 2001.

“It’s like we went back to swapping and all those things I thought we’d never see again, and now it’s turning out to be a boom,” María Marta Argibay Quiroga says. She participates in swapping groups on social media and in-person swap meets, so she can exchange things she does not use for things she needs. For example, she offered up a kilogram (2.2 pounds) of cacao and walked away with a machine that crimps the edges of empanadas.

To obtain clothing for herself and her family, Yanina Estigarría attends events like those organized by Club del Desapego, where group members bring items they no longer use and take what they need from others, all without exchanging money.

“A lot more people are doing this, and there are people who are deeply in need,” Estigarría says. “It doesn’t feed me, but it gives me some savings.”

Following the rhythm of prices

The rising prices pose a challenge for small-business owners as well. They are dedicating more and more time to updating the prices of their products as they bear the risk of selling them below cost and not being able to replenish their merchandise.

“In previous years, prices rose every two or three months. Now they go up three times within 10 days. It’s killing us because it’s making us work three times and lose three times,” says Pablo Costa, who owns a family-run hardware store.

In response, the family adopted a system: When they stock inventory, they attach the price along with a letter. Each time suppliers increase a price, they change the letter, and a list taped to the counter shows the percentage increase from one letter to the next. That way, when they ring up a product that was priced a month ago, they can use the letters to calculate the current price.

“That’s our anti-inflation method. I’m sure there are better ones, but we’ve gone too far to change course now,” Costa says. “Otherwise, we’d have to have a person whose sole responsibility is to update prices all the time.”

The business owner says he does not like constantly raising prices, but he has no alternative.

“If you don’t manage [your business] like this, then you’d have to close,” he says.

Gasoline

Not all sectors of the economy have that leeway. Some workers, such as taxi drivers and app-based delivery workers, impacted by the 157% climb in gasoline prices since November 2023, cannot decide for themselves when to raise their fees because they are regulated either by the government or by the companies they work for.

“Everything went up and the pay stayed the same,” says César Kandia, an app-based deliveryman.

In December, Kandia went from spending 6,000 to 10,000 pesos (7.10 to 11.90 United States dollars) on gasoline per week. That means 4,000 pesos (almost 5 dollars) he used to take home, but now no longer has.

Many people hurry to load up on fuel before the prices go up, says Mariana García, a gas station worker. “The line got to be three blocks [about 1,000 feet] long, but they can’t take more than one tank.”

Claudio Fabián Poggio, a taxi driver, says the only way to compensate for the increase in fuel prices is with more work: “You have to be behind the wheel more hours than usual.”