In Argentina, escalating inflation, which has accumulated 114% in the last 12 months, has driven Argentines with greater purchasing power to respond with a frenzy of consumption. Despite persistent economic problems, people are looking to enjoy themselves and escape the instability they have experienced for many years. Restaurants are full, there are long lines to get into the theater, and concerts sell out in a matter of hours.
Inflation in Argentina is one of the highest in the world and is currently experiencing its largest increase in 30 years, with a monthly rate of around 8%. This has especially affected the poorest, who represent 40% of the population and are suffocated by price increases.
The strategy of Argentine consumers is based on practices that their parents and grandparents used throughout their lives. Since buying a house or a car is unattainable for many, people spend their money on other things. Access to credit has been limited to smaller-scale purchases and has virtually disappeared for major expenditures such as housing or new cars.
Argentines of all social levels are boosting their spending in different ways. Some choose to attend concerts instead of taking vacations, while others enjoy a pizza and a beer instead of paying for a concert. Prices are rising so fast that making credit card purchases and paying in full on time means some savings.
Supermarkets and stores offer promotions and discounts to entice consumers, including two-for-one offers, discounts for using specific credit cards, and financing purchases in monthly installments. All of this contributes to “liquefying” prices and facilitating consumption.
However, saving has become more difficult due to inflation. Wages are spent quickly, and money loses value over time. The wide dispersion of prices makes it difficult to determine whether something is cheap or expensive, as benchmarks are constantly changing.
In this scenario, consumers are advised to shop around and have a culture of consumption. Some strategies include buying non-perishable food together with other families or stockpiling products to protect against price increases.