“Heard it on No Te Duermas”
In the usual economic and finance column of the radio program, Darío Banga discussed the drop in the dollar and what is expected in terms of tourism.
Tomás Modini
@ModiniTomas
At the beginning of his column on No Te Duermas, Darío Banga analyzed the situation with the dollar: “The reality is that a cheap dollar favors those who have the capacity to buy or save, which in this case means those with high purchasing power who can shelter in a type of exchange rate. It benefits the more affluent class in Argentina, those who can travel and vacation in Miami, Brazil, and other places.”
“Obviously, this is very bad for industries because if imports are opened up with this exchange rate, they could have a really hard time. That’s why they’re upset, and orthodox economists are telling the government that the exchange rate is not competitive for national industry,” he expanded.
He also explained that “with this dollar, you import and it’s better to buy from foreign companies rather than local ones,” adding that “entrepreneurs can shift their business model by moving from production to importing and selling products.”
“They can change their business dynamics, but the ones who are left out are the workers, because they won’t need labor to produce,” he added.
The tourism sector, another casualty
On the other hand, Banga stated: “The dollar, as it is, is very detrimental to international tourism in Argentina as well. We’re entering a phase where the country is living off tourism. An example is the context of the Copa Libertadores final played between Botafogo and Atlético Mineiro last week at River. The Brazilian fans who came during those days said the country was extremely expensive.”
“In Brazil, they pay 8 reais for a beer, and here it’s 40. There’s hidden inflation in dollars for foreigners. This harms tourism and, conversely, also national tourism. International residents will find Argentina expensive, but for locals, it’s practically the same cost as going to Brazil,” he explained.
He further added that “many companies, especially in tourism, have been talking about how the summer on the Atlantic coast looks very complicated because the class that can vacation is struggling due to the loss of purchasing power of salaries,” and that “it also happens that those who can save may choose other international destinations.”
“They’re preparing for a rather complicated season. They don’t see it positively, and the tourism migration doesn’t look promising. However, it’s still not as expensive as in previous times in terms of prices,” he elaborated.
Prices on the coast
In line with the above, the expert emphasized: “We’ll have to see when the season starts, but not long ago, prices were very affordable, even cheaper than in Buenos Aires and the capital, with restaurants, for example.”
“Maybe it’s a strategy because the season hasn’t started yet, and then they’ll increase prices. Or maybe they need to keep these prices because tourism won’t be favorable to them,” he noted.
Before concluding the first segment, he pointed out that “rental costs are extremely high, and so are beach umbrella rentals. In fact, anyone who can rent an umbrella is already in the middle class or above,” adding that “it’s important to understand how society views Milei’s approach to the economy, which is very similar to the 90s, with a collapsed production framework.”
“And that leads to most people being left without jobs, compounded by an inflation rate that’s supposedly going to be 2.8 percent in November, which is calm, and an exchange rate that may remain stable. But we really don’t know if the public and the citizens will care about layoffs and things not being so well. And that feels very 90s,” he concluded.
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