Buenos Aires, Argentina — In times like these in Argentina, prices are one thing you cannot guarantee.
Ask Diego Barrera and Claudio Cayeta, who own a small aluminum and glass shop in the Buenos Aires neighbourhood of Palermo. The business partners spent two weeks last month navigating a virtual paralysis because of the volatile economic situation gripping the country, unable to source the material they needed, and as a result unable to quote prices to their customers.
“Our providers won’t give us anything because the [United States] dollar goes up every day, so they don’t want to lose money,” said Barrera, 43, whose stock has dwindled as the uncertainty around them climbs.
“I understand because the same thing happens to me,” he said. “I’ve already lost money on the prices that I quoted some of my customers.”
This reality has become alarmingly common in Argentina, with its economy unravelling at an accelerating rate. The rising value of the US dollar is actually a measure of the plummeting value of the Argentinian peso, which sank by as much as 25 percent on the black market over the month of April. On April 25 it hit a record low, grazing 500 pesos for one US dollar at the unofficial rate, the one that is most often used as a benchmark for average Argentinians because currency controls limit how much they can buy at the official exchange rate.
With inflation at more than 104 percent over the last 12 months, according to official statistics, it is increasingly difficult to know what anything is worth, let alone budget for everyday items. Food prices alone jumped an average of 10 percent in March over the previous month in the Greater Buenos Aires region — fruits and vegetables around 15 percent; eggs 25 percent.
Raw materials, like the ones Barrera and Cayeta work with, are also impossible to predict, because the prices rise and fall with the value of the currency. The price of glass went up 10 percent mid April, said Barrera, and his provider advised him of a second increase by the same amount two weeks later.
All of this has fuelled a climate of political instability during an election year. The deeply unpopular President Alberto Fernandez formally announced he would not seek re-election, and later blamed the depreciating currency on rumours and speculation driven by right-wing politicians.
In a tweet, Economy Minister Sergio Massa said he would use “all the tools of the state to order this situation”, and that included redefining the terms of a controversial agreement with the International Monetary Fund (IMF) to pay back a $44bn loan.
After the Central Bank of Argentina intervened and traded bonds on April 25, a move contrary to its agreement with the IMF, the unofficial exchange rate plummeted to 460 pesos per one US dollar. Argentina also announced that it would start to pay imports from China with the yuan, rather than the dollar, a move that will help safeguard its greenback reserves.
But on the street, the damage from the volatility has already been done.
‘Hunt for the best price’
“Don’t ask me how it is that I adapt, but somehow I manage to do it,” said Emiliano Espindola, 47, as he mixed feta cheese with spices, tomatoes and cucumber in the back of a Middle Eastern take-out shop. He’s a cook in Belgrano, an affluent part of Buenos Aires where, he noted, people were perhaps insulated from the financial volatility of the week. But not him, a worker, who commutes an hour and a half each way by bus from the outskirts of Buenos Aires so he can provide for his adolescent daughter. Espindola will pick up odd jobs as a construction worker to make ends meet.
“I’m just always on the hunt for the best price, but at the same time reducing my costs,” he said. “In general, the economic pain is across the board. The cost of the bus ticket goes up every month. And let’s not even talk about groceries. One week you have one price, the next week you have another.”
For Yolanda Gonzalez, a 53-year-old nurse and the main breadwinner in her home, the solution is cutting back on the number of meals her family eats. They can’t replace their clothes, and they limit their outings to ones that are free, such as a sunny afternoon in the park, with the traditional yerba mate infusion as a companion. “You work 24 hours, and it’s not enough, you work 30 days and it’s not enough,” she said.
Argentina has spent most of the last 12 years either in a recession or stagnant, said economist Martin Kalos, a director at the Buenos Aires-based firm EPyCA Consultores.
The latest figures from 2022 show poverty afflicts nearly 40 percent of the population, and one out of every two children live under the poverty line, according to the national census collector. This crisis is one that dates back four decades, with the gradual erosion of the country’s productive capacity, and the widening gap between rich and poor.
“Argentina needs to urgently recover its growth, but first it needs an economic stabilisation that it hasn’t been able to achieve,” said Kalos. “Argentina’s inflation rates are not only above 100 percent, but they are moving faster, and we don’t know how close they will get to 130 or 150 percent in the next year.”
Argentina’s government has turned to price-fixing schemes to try to soften the blow of ravenous inflation, hammering out deals with big grocery store chains. But even these programmes have their limitations — supply varies from store to store, and smaller grocers are outside of the price-fixing agreements, and have to stock their shelves at wholesalers, making it impossible for them to compete with the cheapest price on offer.
Cheaper alternatives
The incessant rise of prices means that cheaper brands of products are flooding the market.
Victoria Alcober holds out a handful of “unofficial” cigarette packets that she started offering at her small grocery store in the city of Ensenada, about one hour from the capital of Buenos Aires. It was her own clients who alerted her to the packs, which cost about one-third the price of the bigger, better-known brands.
“As a merchant, you have to go looking for them because it’s what people are buying today,” she said. “There are a lot of alternative brands that they’re using now because of all the price increases.”
Argentinians are also looking for political alternatives. Presidential and legislative elections will occur in October, and the deepening recession has resuscitated radical positions, including ditching the peso altogether and using the US dollar as official tender, a proposal that is pushed in particular by libertarian candidate Javier Milei.
Barrera, the glass store owner, is deeply frustrated and exhausted by day-to-day financial uncertainty and the inability of the political class to rein in the chaos. But he fears that such extreme positions as the dollarisation of the economy will only make matters worse, and he worries that good leadership alternatives will not materialise. “The iron is hot now,” he said. “They know they’re going to get burned.”
OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.
Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.
The change is scheduled to come into force on Nov. 8.
As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.
The program has also come under fire for allegations of mistreatment of workers.
A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.
In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.
The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.
According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.
The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.
Temporary foreign workers in the agriculture sector are not affected by past rule changes.
This report by The Canadian Press was first published Oct. 21, 2024.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.