Argentina's 300% inflation and propped-up peso spawn Paraguay border ghost town
NANAWA, Paraguay - Paraguayan shoppers used to flock in their droves to the border town of Nanawa to buy cheap imports from Argentina, where the weak peso currency for years kept relative prices low for fuel, medicine and groceries smuggled in across the frontier.
Since then the peso has been allowed to depreciate just 2% per month on a controlled 'crawling-peg', and monthly inflation - while slowing - has been some 10-20% each month. That's meant prices in dollar terms have soared. Data from her team shows the price gap between Uruguay and Argentina plunged from 180% in September before Milei took office to 50% in March as Argentine relative prices shot up.
Products like olive oil and toothpaste are becoming small luxuries. Reuters found on average a half liter bottle of olive oil cost $15 in Buenos Aires, with some brands priced as high as $26. Colgate toothpaste was 4,976 pesos or $5 for a single 90g tube, twice what retailers charge in Paraguay and Uruguay.
"What I will say is I've heard of fewer people crossing over the bridge to Argentina to shop," said Uruguayan cafe owner Lilian who runs Helianthus Bistro in the border town of Fray Bentos, just across the Uruguay River from Argentina.
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