Buenos Aires is Cheap?

According to the international consultancy group Mercer, as quoted in Mercopress Noticias, Buenos Aires is getting more expensive for foreigners. That's no surprise - anyone who's spent any time in town the last couple years can tell you that hotels, restaurants, taxis, fuel prices, and other services are all rising rapidly. What's surprising is that Mercer, whose annual cost of living survey for expatriates around the world appears only in part on their website, says that Buenos Aires still ranks 138th out of 143 cities worldwide, making it nearly the cheapest major city in the world (Asunción, in neighboring Paraguay, is the cheapest). The most expensive is Moscow, and São Paulo (25th) is the most expensive in South America.

According to Mercer, the weak dollar partially accounts for increasing costs, but the dollar has been holding its own against the Argentine currency, at just over three pesos per dollar. In reality, domestic inflation that most independent economists calculate around 20 percent (as opposed to government statistics that insist on six or seven percent) is the major factor here. And that makes it hard to believe that Buenos Aires - despite Mercer's assertions - ranks where it does. Having spent extended periods in both Santiago (Chile) and Montevideo (Uruguay) earlier this year, I find it implausible that either of those cities is significantly more expensive than Buenos Aires.