Amid rising prices and presidential promises of slashed transport and utility subsidies, Argentines are responding by cancelling holiday reservations, stockpiling goods and putting their savings into virtual wallets.
With 160 percent inflation showing no sign of slowing in the coming months, fixed-term deposits and the purchase of dollars are two options, but they still carry problems: the fear of losing savings via frozen bank accounts and the ongoing impossibility of purchasing foreign currency legally.
Assessing the impact of austerity, Perfil gathered testimonies from ordinary people who have already made their adjustments at home.
“After the election result, what I did to prepare for the adjustment was to avoid debts and try to generate savings,” said 43-year-old Andrea Lisiardo. “First I did it through a fixed-term deposit, because with foreign exchange restrictions and the conditions, I couldn’t buy dollars. And then, for example, I cut back on outings and expenses. If I do go out, I try to spend as little as possible.
The traditional ‘aguinaldo’ half-Christmas salary bonus, which in previous times was used for treats or to pay for a part of holidays, now has another function: protection.
“I wasn’t sure whether to put that money in a fixed-term deposit, so I put it into a virtual wallet, and I’m assessing whether to stock up on non-perishable goods,” added Lisiardo.
The cutbacks already imposed on Argentines to try to soften the blow also have an impact on employment. “I had someone who helped me with the cleaning at home, but I decided to stop calling her and reduce that expense,” explained Marianela Messina, also 43. “I also stopped buying some things for the kids, such as small toys or sweets, which are not essential.”
According to the CAME Argentine Confederation of Medium-Sized Enterprises, not only the sales of non-essential goods have dropped: in November the biggest fall in retail terms was in the food sector, which decreased by 7.7 percent year-to-year.
Small savers are baffled about what to do. “I had a fixed-term deposit, but I cancelled it because I don’t know what will happen to those banking reserves,” Messina added.
Most people have stopped buying non-essential items, and holidays fall under that category too. “I’m preparing for the adjustment by not making unnecessary expenses. If I buy by instalments, no more than six, interest-free [quotas]. I invested in a tract of land and we cancelled our holidays,” stated Lucas Moreno, 41.
“For now I try to spend on necessary goods,” agrees 27-year-old Gonzalo Bustos. “I had to give up family outings and there will probably be no holidays, since everything has skyrocketed: fuel, food, accommodation.
Gonzalo has decided to keep his savings in a fixed-term deposit, “which I’ll use in case of an emergency.”
Stockpiling, attractive to many, has also been restricted by supermarkets and wholesalers. “In my case I went shopping, especially for my mum, who’s retired,” explained 37-year-old Magdalena Igenes. “But there are products that can’t be bought more than two or three units at a time, and they’re basic products like milk or pasta. For now I’ve stocked up by going to the supermarket every day. I bought products such as sweetener or conserves and tried to buy other things with the maximum expiration date, such as yoghurt. I’m trying to spend all the pesos I have and to settle instalments,” she concluded.
“I’ve been preparing since before the October election, because after the post-PASO devaluation I understood difficult times were coming,” detailed 46-year-old Mónica Sosa in an interview. “I did some extra gigs, [planned] to touch that money, and I put it into virtual wallets – fixed-term deposits did not make me feel easy, the ghost of frozen accounts is always there.”
Another option are new platforms which help preserve the money at a dollar value. “I downloaded an app and bought dollars at the Electronic MEP rate with the 30,000-peso bonus. I also made use of VAT discounts and bought non-perishables,” she added.
Daiana de la Nava, 38, is another who decided to cancel a family holiday. “We’ve chosen a fixed-term deposit and stocked up on food, cleaning products and clothes,” she stated.
Those who are thinking of going on holiday plan on saving as well. “We’re thinking of having group holidays in a cheaper place than usual, with a lot fewer amenities,” added Sosa.
Holidays in 2024 are also a problem for those offering those services. “This year has been very particular, we’ve had to think of ways to have reservations that helps both us, the service providers, and the people who come to stay,” explained Julia Acebo, who has a cabin complex in Nono, Córdoba. “At a given time I set a rate and charged 100 percent of the reservation. With that I was able to buy supplies to improve facilities, but as time went by it got complicated and I had to start thinking of a new strategy to keep those reservations.”
She summarised: “Right now I have a lot of inquiries, but not a lot of bookings. This time of the year they’re under 50 percent [occupancy]. I think people are still thinking about it.”
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