Living ONE DAY with HYPERINFLATION in Argentina
Living one day with HYPERINFLATION in Argentina
Today we will talk about Argentina, one of the countries with the highest inflation rates in 2023.
Arriving in Argentina
Arriving in Argentina in 2023 brought to me a few interesting sensations. From one side, I was arriving in what was once one of the wealthiest countries in the world, with beautiful art nouveau architecture, a rich culture and some of the best restaurants you can dream of.
On the other hand, I knew that the wealth of Argentina was mostly a memory from the past. Argentina lost its title of being among the wealthiest countries in the world decades ago, and in recent years it has also lost the title of being a relatively economically stable country to find itself among the most chaotic countries when we talk about economy. Names like Turkey, Venezuela or Iran are often mentioned together with Argentina when we talk about economic disasters in the current century.
The current situation in Argentina
Let’s understand a little bit on why Argentina got to this, and what is the current situation in the country.
Despite the fact the inflation rate in Argentina is currently hovering around 190% per year, according to most sources, that still doesn’t characterize a situation of hyperinflation. The concept is arbitrary, but usually a hyperinflation is the one going above 50% per month. In other words, way more than what is felt in Argentina at the moment.
There are several reasons that brought Argentina’s economy to its knees. In order not to get too complex on this matter, I will just mention the key reasons.
Excessive public spending is one of the main reasons behind Argentina’s inflation. Coupled with extreme incompetence from most of the previous governments in the country, Argentina opted for the dangerous path of quantitative easing, which in simple English can be translated as printing money as if there is no tomorrow.
So, what will happen next in Argentina?
A new president has been elected in Argentina. His name is Javier Milei, and he has very ambitious ideas to change the course of the country’s erratic economy.
Among his plans, the privatization of many of Argentina’s huge public companies such as Aerolineas Argentinas, the national flag carrier airline.
Apart from that, he also wants to reform the pension system and cut benefits.
One of his main ideas though, is to change the national currency to the US dollar. An idea that has already worked well in South America. Ecuador for example dropped its currency in the year 2000, adopting the US dollar as a legal tender. Things are going good for the Ecuadorian economy, at least when we compare it with the years it had its own currency.
But, as the well known phrase says: In the midst of every crisis lies great opportunity.
How you can benefit from the economic situation in Argentina
So, let’s talk about how you can benefit from the economic situation in Argentina. I am certainly not cheering for things to get worse in Argentina, and I truly hope the country gets back on its economic track in the near future, but, the current chaos in the country offers a window of opportunity for most foreigners visiting the country.
The opportunity for foreigners lies on the bizarre currency exchange system currently in place in Argentina. There are more than 10 types of exchange rates in Argentina. To be honest, I can’t even tell you the exact number of exchange types, as they keep adding more options to the list.
The weird currency exchange system in Argentina
As I said, currently Argentina has many different currency exchange rates when changing the local pesos to any foreign currency. The reason why they exist is initially to control inflation and help the government to stop losing their national reserves. In reality however, it is just part of a series of economic blunders the government is relentlessly doing, completely unable to create a monetary policy that is even partially effective.
The key difference here is that: while Argentinians can only access good exchange rates to a certain extent, as various capital controls and price restrictions apply, foreigners can always access the best exchange rate, and this is where the opportunity is.
Visa and Residence Permit in Argentina
If you want to stay longer and reside in Argentina, it is also quite easy to get a residence permit in the country.
The best option is to get a residence permit as a rentista. A rentista is a person that has one or several types of income from one or more sources.
For retirees, the amount is the same, but you have to prove you are officially retired in some country. There are no significant differences or benefits between these 2 type of residence permits.
