Wednesday, September 3, 2008

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.


Mamacita Chilena said...

Your link to Mercer isn't working, fyi!

Wayne Bernhardson said...

Thank you, I have corrected the link.

Cachorrita said...

I travel frequently to Buenos Aires. I lived there 4 years ago, and it was extremely cheap then. Now everything is much more expensive, from ice cream to clothes ( two of my favorite things in Buenos Aires). Inflation is a huge problem there right now, although I still think BA is cheaper than Santiago.

Wayne Bernhardson said...

Cachorrita, I agree Santiago is a little more expensive, but with the recent drop in the Chilean peso, the differences are not that great on most things. One thing that is still substantially cheaper in BA in public transportation, which gets huge subsidies in Argentina, but most other prices are reaching Chilean levels, if not quite there yet.

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