Published in El Pais, september 3rd 2019.
When one thinks of inflation crisis in South America, one would be forgiven if your immediately thought of the situation in Venezuela. The country’s inflation rate was 130.060% in 2018 and shows little sign of slowing down as evident by the growing hunger and humanitarian crisis they are facing. Argentina however is dealing with their own situation. After election, the peso dropped 30% in one day, from 1 USD being worth 44 to 60. Reaction from the people were calm but tense. Some stores would refuse to sell certain goods as they no longer knew what an appropriate price was, it was impossible to buy dollars and bank accounts with dollars were briefly frozen.
Over the next couple of weeks, the peso continued to go up and down at rates that would make Bitcoin blush before finally settle around 55 pesos per dollar. That is an inflation rate of 25% over a 2-week period. Unfortunately, for Argentineans this is nothing new as the peso continues to devaluate. Immediately, prices of goods went up in double digit percentages, but it was an email from my cell phone provider Tuenti that really frustrated me. My plan was going up from 290 pesos a month to 400.
The increase was not surprising but the amount was. The peso had dropped 25%, yet Tuenti had increased my bill by over 38%. I was upset and decided to contact Tuenti on Facebook asking how they could justify such an increase. The response was an insincere apology followed by a gif of a man’s head exploding. My complaint went on deaf ears and I realized this was happening everywhere. Restaurants and stores were raising prices well above the rate of inflation. In short, companies everywhere are taking advantage of this crisis by raising their prices and hiding behind the peso as the reason.
When the next president takes power after the final elections in October, regulations should be put in place to prevent such price hikes occurring in the future. Other countries should monitor the situation in Argentina to create emergency plans should their own country face such a crisis. The people here are suffering and they do not need large companies making things worse.