Under Argentina’s new president, fuel prices have risen by 60% and diaper prices have doubled

In the past two weeks, the owner of a trendy wine bar in Buenos Aires has seen the price of beef rise by 73 percent, while the zucchini he uses in salads rose by 140 percent. An Uber driver paid 60 percent more to fill her tank. And one dad said he spent twice as much on diapers for his toddler than he did last month.

In Argentina, a country synonymous with galloping inflation, people are used to paying more for almost everything. But under the country’s new president, life is quickly becoming even more painful.

When Javier Milei was elected president on November 19, the country was already suffering from the third highest inflation rate in the world, with prices 160 percent higher than a year earlier.

But since Mr. Milei took office on Dec. 10 and quickly devalued Argentina’s currency, prices have risen at such a staggering pace that many in this South American country of 46 million people are making new calculations about how their businesses or households will fare far away. can survive in the future. deeper economic crisis that the country is already facing.

“Since Milei won, we have been constantly worried,” said Fernando González Galli, 36, a philosophy teacher at a high school in Buenos Aires.

Mr Galli has tried to make cuts without making life worse for his two daughters, who are six years and 18 months old. Among other things, he has switched to a cheaper brand of diapers and is in a hurry to spend his Argentine pesos before their value decomposes even further. “As soon as I get my paycheck, I’m going to buy everything I can,” he said.

Nahuel Carbajo, 37, owner of Naranjo Bar, a trendy Buenos Aires wine bar, said he, like most Argentinians, had become accustomed to regular price increases, but the past week went far beyond what even he was used to.

Since Mr. Milei won, the price for the premium steak Mr. Carbajo serves has risen 73 percent, to 14,580 pesos, or about $18, per kilogram, about 2.2 pounds; a five-kilo box of zucchini rose from 6,500 to 15,600 pesos; and avocados cost 51 percent more than at the beginning of this month.

“There is no way that people’s salaries or incomes are adjusting at that speed,” Mr. Carbajo said.

Mr Milei’s spokesman, Manuel Adorni, said rising inflation was the inevitable consequence of Argentina’s troubled economy finally recovering.

“We have a lot of problems and unresolved issues that we need to start addressing,” he said. “We will inevitably experience months of high inflation.”

Mr. Milei has warned Argentines that his plans to shrink the government and rebuild the economy would initially hurt. “I would rather tell you the uncomfortable truth than a comfortable lie,” he said in his inaugural address, adding last week that he wanted to end the country’s “model of decline.”

The Argentine economy has been in crisis for years, with chronic inflation, rising poverty and a currency that has depreciated. The economic turmoil paved the way to the presidency for Mr. Milei, a political outsider who spent years as an economist and television pundit railing against what he called corrupt politicians who had destroyed the economy, often for personal gain.

During the campaign, he promised to carry a chainsaw for government spending and regulations, even wielding a real chainsaw at rallies.

After Mr. Milei’s victory, price increases began to accelerate in anticipation of his new policies.

The previous left-wing government had used complex currency controls, consumer subsidies and other measures to inflate the peso’s official value and keep several key prices artificially low, including gas, transportation and electricity.

Mr. Milei has vowed to undo all that, and he has wasted little time.

Two days after taking office, Mr. Milei began cutting government spending, including consumer subsidies. He also devalued the peso by 54 percent, bringing the government’s exchange rate much closer to the peso’s market valuation.

Economists said such measures were necessary to solve Argentina’s long-term financial problems. But they also brought short-term pain in the form of even faster inflation. Some analysts question the lack of adequate safety nets for Argentina’s poorest.

According to government data, prices rose 13 percent in November compared to October. Analysts predict that prices will rise another 25 to 30 percent this month. And from now through February, some economists predict an 80 percent jump, according to Santiago Manoukian, chief economist at Ecolatina, an economic consultancy.

The forecasts are partly driven by surging gas prices, which rose 60 percent between December 7 and 13, and are having a trickle-down effect on the economy.

The devaluation of the currency has made imported products such as coffee, electronic appliances and gas immediately more expensive because they are priced in US dollars. For example, a monthly Netflix subscription in Argentina rose 60 percent to 6,676 pesos, or $8.30, the day after the devaluation. It also prompted some domestic producers, including farmers and ranchers, to raise prices to bring them in line with their own rising costs.

Due to chronically high inflation, unions often negotiate large wage increases in an attempt to keep pace, but those wage increases are quickly eaten up by sharp price increases. Informal workers, a list that includes nannies and street vendors and who make up almost half of the economy, also don’t get such raises.

On Wednesday, Mr. Milei launched his next big steps to reform the government and economy with an emergency decree that significantly reduces the state’s role in the economy and eliminates a slew of regulations.

The measure prohibits the state from regulating the rental real estate market and setting limits on the fees that banks and health insurers can charge customers; changes labor laws to make it easier to fire workers while placing limits on strikes; and turns state-owned enterprises into corporations so they can be privatized.

Many legal analysts immediately questioned the constitutionality of the decree, saying Mr. Milei was trying to undermine Congress.

After the speech, people across Buenos Aires, like 73-year-old Jesusa Orfelia Peralta, a retiree, took to the streets and banged on pots to show their displeasure.

She was afraid that price increases would make good health care too expensive for her and her husband. Despite serious spinal problems, she said she didn’t hesitate to go out with a walker and express her anger in public. “Where else would I be?” she said.

Mr. Milei has tried to discourage protests by threatening to cancel welfare plans and fining anyone involved in demonstrations that block roads. Human rights groups have widely criticized such a policy, saying it limits the right to peaceful protest.

For now, most Argentinians are trying to figure out how to make ends meet in what often feels like both a convoluted economics course and a mad dash to buy before prices rise again.

“I always say that we are in college and every five minutes we take a difficult exam,” says Roberto Nicolás Ormeño, owner of El Gauchito, a small empanada shop in downtown Buenos Aires.

Mr. Ormeño said he scoured the market for his ingredients and changed suppliers almost every week because they raised prices too much or provided poorer quality products.

He’s trying to avoid passing on too many of his price increases to customers, though he’s not sure how long he can keep that up. “I see my regulars buying one dozen instead of two dozen empanadas,” he said.

Marisol del Valle Cardozo, who has a three-year-old daughter, has been cutting back in an effort to make ends meet, turning to cheaper brands and going out less. “We don’t turn on the air conditioning very often,” she said. “We cut our weekend plans from four times a month to just once.”

Ms. Cardozo, who works for a police station outside Buenos Aires, said she received a raise this year, but it is still not enough. She also drives an Uber, but says fare increases have not kept pace with rising gas prices.

Despite the challenges, Ms. Cardozo said she remained a supporter of Milei and hoped his policies would work.

“We were living in a fantasy,” she said, referring to gasoline prices before the recent increase. “If these adjustments are necessary to ultimately thrive, they are worth it.”

Jack Nicas contributed reporting from Rio de Janeiro.