Even with inflation, Argentina has products up to 77% cheaper than Brazil
Inflation is relentless in Argentina. Price increases have been on an upward spiral for months, and the Consumer Price Index (CPI) is expected to exceed 100% this year, a reality that worries the government and significantly affects the most vulnerable layers of the population.
However, for those who arrive in the country with dollars, the depreciation of the local currency leaves a wide range of products at prices up to 77% lower than those found in Brazil and Uruguay.
Inflation is running at more than 6% per month, creating multiple economic distortions.
One of them is that price references end up being lost. In this context, a recent report by Quantum Finanzas, which compares retail prices in Argentina with those of three other countries in the region, is particularly relevant.
WORLD PRICE RANKING: ARGENTINA VS. NEIGHBORING COUNTRIES
The study prepared by the firm led by Daniel Marx compared the prices of basic food products, hygiene, clothing, electronics, and fuel in Argentina, Brazil, Chile, and Uruguay.
It concluded that Argentina tends to be cheaper than its neighbors when the parallel exchange rate (or CCL dollar) is taken as a reference. But the situation can change when using the official exchange rate in the conversion.
As can be seen from the report, the price of basic foodstuffs in Argentina is lower than the average of these countries: 49% cheaper at the official exchange rate and 74% at the parallel exchange rate.
The same applies to fuel, which is 42% cheaper at the official exchange rate and 71% lower measured to the CCL dollar.
On the other hand, the clothing price is 57% higher at the official exchange rate and 21% lower at the CCL.
Something similar happens with the price of electronics, 65% higher at the official exchange rate and 16% lower at CCL.
COMPARATIVE
In comparative terms, the company took the prices of a small sample of goods in Argentina with the same in Brazil, Chile, and Uruguay.
And while Quantum emphasizes that “the difficulties and limitations of such an analysis are well known,” the company considers the information provided by the study as “useful” for “an economy with important imbalances and tensions.”
The result comes from a survey of prices on online shopping sites of supermarkets and retail channels.
The prices of similar products are translated into current dollars, considering the official exchange rate and the parallel exchange rate (CCL) in the case of Argentina.
Finally, the report groups these products according to the consumption item corresponding to basic foodstuffs, personal hygiene, clothing, electronics, and fuel.
In summary, Quantum’s study shows that prices for staple foods and fuel are lower when both exchange rates are used, while personal care products, clothing, and electronics show differences depending on the exchange rate used.
WHAT IS CHEAPER TO BUY IN EACH COUNTRY?
Regarding food, it can be seen that both the liter of milk and the kilo of beef are cheaper in Argentina, both at the official exchange rate and the CCL. Behind is Chile, while Brazil and Uruguay have the highest prices.
As for personal hygiene products, Argentina has the lowest prices in the region for soap at the parallel exchange rate. But if at the official exchange rate, prices in Brazil are lower.
That is also where we see the lowest price for double-sheet toilet paper. Uruguay, however, is by far the most expensive country for these products.
For electronics, the trend is not clear. A Samsung Galaxy S22 cell phone has the lowest price in Argentina at the official exchange rate, while the highest price is found in Brazil.
The most attractive price for a 60-inch LG TV with 4K technology is in Chile, followed by Brazil and Uruguay. Argentina is the most expensive country at both the parallel and official exchange rates.
Clothing seems to have a more uniform trend. Argentina is the most expensive country if the price is measured at the official exchange rate, but it is one of the cheapest if the CCL is taken as a reference.
For a short-sleeved T-shirt and a pair of men’s sneakers, the best prices are in Brazil; for women’s jogging pants, in Argentina; and for designer jeans, the lowest price is in Chile.
Finally, Uruguay has the most expensive fuel. In Argentina, on the other hand, the lowest prices are observed if we take the official exchange rate as a reference.
With information from Bloomberg
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