Planning your stay in Buenos Aires requires more than checking accommodations, tourist attractions and places to eat. The cost of living in Buenos Aires, although it is affordable in most areas, is framed in an economy that oscillates between recession and reactivation.
For an Argentine, talking about inflation is totally natural. But for a foreigner, it is necessary to be prepared and have an explanation beforehand, so that you can make as close a calculation as possible of how much it will cost you to live in Buenos Aires.
What You Should Know About The Cost Of Living in Buenos Aires?
Inflation is a Persistent Issue
Inflation in Argentina is a chronic problem. There has never been a consensus on the true reason why the country suffers from such high levels of inflation, especially when compared to other Latin American countries where the situation is not nearly as severe.
Depending on the government in power, inflation is either seen as a problem to be solved or a phenomenon to live with.
In recent years, annual inflation rates have not fallen below 30%, sometimes reaching as high as 200%. This phenomenon not only erodes people’s purchasing power but also creates obstacles for savings, credit, and investment.
Devaluation of the Local Currency
From December 2022 to December 2023, the Argentine peso experienced a devaluation of 77.89%. Being among the countries with the most depreciated currency is not a new occurrence for Argentina.
The effects of inflation on purchasing power are often “countered” with wage increases, renegotiations, bonuses, and clauses, but ultimately, these measures only fuel the inflationary process. The most evident consequence of uncontrolled inflation is the loss of value of the Argentine peso.
Many Argentinians have turned away from the peso as a means of saving or investment, opting instead for the dollar. However, while foreign currencies benefit from devaluation in Argentina, this results in limited purchasing power and restrictions on accessing foreign currency for savings purposes for Argentinians.
Low Wages
The net salary in Buenos Aires is approximately 426.72 USD. The purchasing power of Argentinians is one of the lowest in the region, especially when measured in dollars and compared to other Latin American countries.
In recent years, this decline in purchasing power and the lack of clear rules for foreign investors have led to an increase in informal work and a decrease in registered employment.
Many choose to diversify their work portfolio and become freelancers, sacrificing stability to generate extra income through multiple jobs or selling services abroad for payment in foreign currency.
Affordable Cost of Living
While the cost of living can be challenging for Argentinians during times of crisis, inflation, and devaluation, it presents an excellent opportunity for foreigners.
The cost of living in a city should not only be analyzed through economic figures and prices but also by what the city offers in return. Buenos Aires stands out among other Latin American cities due to its affordable cost of living for foreigners, combined with excellent living conditions.
These include mobility, green spaces, dining options, accommodations, technology, commercial activity, tourist attractions, and, importantly for remote workers, connectivity.
Exchange Controls
In Argentina, there is no freedom to access foreign currency. Restrictions on purchasing dollars, euros, and other foreign currencies are common and have been chronic in recent years. While explanations for this are varied, it’s crucial to understand that multiple exchange rates exist for buying and selling dollars.
Exchange control policies have strengthened the parallel market, known as the “blue dollar,” where Argentinians can buy foreign currency informally at a higher rate than the official one.
Foreigners visiting Argentina need to quickly grasp the logic of currency exchange in Buenos Aires. Questions about the “blue dollar,” informal markets, and exchange houses often find clear answers through practical experience.
Various Payment Methods
Difficulties in handling cash and Argentine pesos have led to the widespread use of different payment methods in Buenos Aires. Credit and debit cards are commonly used by Argentinians for their purchases, often due to bank discounts or the convenience of not handling cash. Another prevalent payment method is Mercado Pago, the digital wallet and bank of Mercado Libre.
Since 2020, many commercial stores have adopted Mercado Pago, and consumers have embraced this payment method. Simply scanning a QR code allows you to make any purchase without using cards or cash. While cash is still used, its handling difficulties mean it is often reserved for specific uses like tips, taxi rides, or quick and cheap purchases.
Cryptocurrencies
Cryptocurrencies have a presence in Buenos Aires. Activities related to these assets, such as trading and financial investments, have become popular among Argentinians. The process of adopting cryptocurrencies as a payment instrument is ongoing, but it is gaining traction in Buenos Aires.
If you are concerned about how many establishments accept cryptocurrencies in Argentina, rest assured, it is very easy to pay with cryptocurrencies here. Various exchanges offer payment solutions like cards and virtual cards, allowing you to pay with cryptocurrencies directly from your wallet.
Last Considerations
These considerations about the cost of living in Argentina have no other purpose than to give you a complete overview of the national economy. For a foreigner, they may not be so relevant to your budget, but they are when it comes to living in Buenos Aires.
Keep in mind that Argentina has been in a process of new economic policy since December 2023. Therefore, not even Argentines themselves or investors know very well what lies ahead for the national economy in the future. In principle, inflation and exchange controls are seen as the main problems to be attacked.
(Featured Image Source: Kelly Sikkema/unsplash.com)
