We used to comment a lot on the high cost of living here, and the sometimes strange discrepancies between what's expensive and what's not. Now that we've been here longer, I no longer wince at paying $3+ for a cup of coffee in a cafe, though I still refuse to pay full-price for a movie ticket (there are almost always half-price deals available).
The staff at a local hotel put together a list of "How Much do Things Cost?" for visitors. I'm including it here (translated into dollars) to demonstrate two things:
1. The cost of living
2. The huge gap between the official exchange rate and the black market rate (more on that below)
|Item||Official exchange rate (4.5 pesos : dollar)||Black market rate (6 pesos : dollar)|
|Bus||$0.24 - $0.39 depending on distance||$0.18 - $0.29|
|Taxi||During the day the initial meter is $1.62 and then 16cents/200 meters, at night the initial meter is $1.93 and then 19c/200m.||$1.22 then .12cents/200m / $1.45 then 15c/200m|
|Cafe con leche||$3 - $4 depending on the café||$2.33 - $3|
|Medialunas (pastry similar to croissants)||$0.77 - $1.11, depending on the café, $7.11 the dozen in a bakery||$0.58 - $0.83 in cafes, $5.33 the dozen|
|500ml bottle water||$3.33 in a restaurant, $1.33 in a kiosk and $1 in a supermarket||$2.5 / $1 / $0.75|
|600ml soft drink||$3.33 in a restaurant, $1.77 in a kiosk and $1.44 in a supermarket||$2.5 / $1.33 / $1.08|
|Local beer 970cc (not imported)||$1.53 in a supermarket, $6 in a bar||$1.15 / $4.5|
|Pizza||Average $10-$13 for a big pizza, depending on the toppings and the place.||$7.5 - $10|
|Ice cream||$4.44 for a cone||$3.33|
|Lunch menu including main course, beverage and dessert or coffee||$11||$8.33|
|Dining out||Starting at approximately $22 and up per person||$16+|
|Museums||$0 - $2 if the government runs them. The privately owned MALBA charges a $5.55 ticket for adults.||$0-$2 / $4.16|
|Cinema||General ticket: $8.88; 3D: $10.22||$6.66 / $7.66|
|Theater||Starting at $30 and up||$23+|
|Nightclubs||$9 - $15||$7 - $12|
(FYI, I've adapted a list that was aimed at tourists, so it hides the high cost of everyday items like cereal or milk.)
So why include the black market rate? Because it's closer to what goods should actually cost. The Argentine government tightly controls the official exchange rate, using its dollar reserves to intervene almost daily in the local foreign-exchange market. Over the last six to nine months, it has only allowed the peso to devaluate slowly, opening up a wide gap between the official exchange rate and the black market one. The Wall Street Journal explains it better than I can:
Concerns over the economic direction taken by Argentina's government has sent the gap between a tightly controlled official exchange rate and a parallel rate—largely set by businesses conducting complex transactions in stock and bond markets to secure dollars—to multiyear highs. ...
The blue-chip swap involves the purchase of Argentine sovereign bonds or the local shares of companies with listings in the U.S., and the subsequent sale of those securities abroad for dollars. The blue-chip swap rate is the exchange rate that is implicit in these transactions.
The lower value of the parallel rate reflects expectations that Argentina eventually could have to devalue its currency at a swifter pace to trim capital flight and appease exporters.Now most Argentines, us included, can't access the black market rate, so the cost of goods is closer to the middle column. Recently we've found a money transfer service that provides us with pesos at better than the official rate (but not quite as good as the black market one). With inflation at about 25%, getting pesos at a better rate has helped cut into the ever-rising cost of living. But it's still an expensive place to live, and getting more expensive.