The decline in inflation in Argentina has not brought the relief expected by residents and merchants in Puerto Iguazú. The tourist city has seen an exodus of Brazilians, who usually drive local businesses, and is suffering from a drop in sales.
Inflation in the country was at more than 210% per year at the end of 2023, and fell to 43,5% per year, according to data from the Consumer Price Index (IPC) released on Thursday, 12, by the National Institute of Statistics and Censuses (Indec).
Owner of the 7 Bocas taxi stand, Ramon Prestes, 58, says that the city is experiencing a critical moment in tourism, because it is in the low season and, even in previous months, it has not received as many Brazilians as it did in other periods.
The few who decide to cross the border spend much less. “They come because it’s part of the tourist itinerary, but they don’t spend as much as before,” he emphasizes.
During the busy season, according to Ramon, tourists used taxis to take boxes of wine to Brazil. Today, the reality is very different.
Taxi journeys to Foz have been reduced by 50%. Workers hope that the July holidays will make up for the months lost this year.
Despite the difficulties, Ramon believes that the country's economy has improved due to the drop in inflation and public spending.
Horácio Ojeda, 47, a merchant at the Puerto Iguazú Fair, says that the number of Brazilians visiting the market has plummeted and the prices of his products have risen. “Before, I would sell a truckload of wine a month, but now I don’t sell 20 boxes,” he laments.
Tourists, he says, bring an alfajor, an olive oil. For Horácio, Argentina has been in decline for more than 20 years and we need to be patient, because the country's recovery will not be easy.
The appreciation of the peso and the depreciation of the real have become a bad equation for Brazilians accustomed to crossing the border to fill up their cars and go to restaurants. In Foz do Iguaçu, R$1,00 can buy R$200.
To get an idea of the local movement, Iguazú National Park, in Argentina, closed 2024 with a 12% drop in the number of tourists. 1.331.641 people passed through the ticket offices, compared to 1.508.776 in 2023.
In contrast, the park on the Brazilian side celebrated the arrival of 1.893.116 tourists, an increase of 3%.
The parks are one of the main thermometers for measuring tourist movement on the binational border between Brazil and Argentina.
Paraguayan smuggling and poverty
Despite the difficulties, the situation in Puerto Iguazú is a little more comfortable compared to other Argentine municipalities, as there is a lot of tourist activity and residents still have the option of crossing the border with Brazil and Paraguay to shop, taking advantage of the exchange rate difference.
Resident of Puerto Iguazú and cultural producer, Rolando Esteban Matcoskti reports that Puerto Iguazú has an advantage over other Argentine municipalities due to the fact that it has commercial movement with its Brazilian and Paraguayan neighbors.
“There is a saying that goes: when things are bad here, the interior of Argentina is a catastrophe,” Rolando emphasizes.
However, there are small entrepreneurs in the city and in other municipalities that feel the economic downturn.
The prices of goods in the domestic market have risen, and traders are still struggling due to the rise in electricity and fuel prices. With no business, many local supermarkets are laying off employees.
According to the cultural producer, the number of homeless people in the interior of the country has grown and many Argentines are out of work.
As a result, many of them began to cross the border to look for imported products in Paraguay to resell in the country and survive. “There are people coming from Buenos Aires and Córdoba to buy in Paraguay.”
Many of the goods are sold in imported goods stores in Buenos Aires, called Saladitas, which have already been subject to inspections. They include shoes, blankets and clothes — many of which are counterfeit.
Another sign of this trade is the constant and recent seizures, by the Brazilian Federal Police and Federal Revenue Service, of shoes that were destined for Argentine cities.
Professor of International Relations and Integration at the Federal University for Latin American Integration (UNILA), Félix Pablo Friggeri mentions that Argentina's trade situation is complicated due to the appreciation of the peso. The strong currency makes the country an expensive place for Brazilians and Paraguayans.
The exception is goods that are sought after more for their quality or taste than for their price, such as wines, cheeses and olive oils.
Puerto Iguazú, on the other hand, is in a slightly more comfortable situation, because residents can cross the border to Foz do Iguaçu to shop, something that those who live further away do not have, says the professor. “In this sense, the border is protected, but that does not mean that it is economically well off.”
Health insurance: aporophobia and xenophobia
According to Friggeri, unemployment in the country has increased, goods are expensive, and the value of wages has fallen.
For the professor, certain government measures are xenophobic and aporophobic, that is, they reject foreigners and the poor.
One of them refers to the Decree No. 366/2025, which regulates the immigration reform, announced on the 14th by the Milei government.
One of the points of the decree is the requirement for foreign tourists to present health insurance to obtain medical care.
If they do not meet the requirement, they will not receive care in the public health system (except in emergencies) or will have to bear the costs. In Puerto Iguazú, insurance is not yet required.
For the professor, the measure aims to block access to healthcare mainly for Bolivians and Paraguayans with less financial means who undergo complex treatments in Buenos Aires, including cancer. “People from Paraguay use Argentine medicine more than Brazilian medicine,” he says.
In Paraguay, more complex procedures are paid for, and the population cannot afford the expenses. The country's public health system lacks supplies, such as syringes.
“Milei represents a bit of this ideology of the rich and upper middle class, even without a material base”, says the professor.
According to him, the Argentine leader's speech against corruption, public spending and social measures has had some success among the middle class and a large part of the poor middle class.
This discourse gains strength due to the evangelization that is advancing in Argentina and supports the theory of prosperity.
Another component in Milei's favor is the erosion of Peronism — which is the popular political tool — and of the government of Alberto Fernández, which ended up being neither Peronist nor liberal, causing disappointment.
Falling inflation does not guarantee sales
For the professor, given the astronomical inflation in Argentina, it was a relief, however the problem is that today the population does not have purchasing power.
Friggeri says that the government’s solution to controlling inflation is artificial, because retailers are unable to sell their products. One of the elements used to reduce inflation is to reduce consumption capacity. “If you reduce consumption capacity, things go down, but they don’t sell. They go down because they don’t sell.”
He still believes that inflation has a political influence, it is not merely an economic phenomenon. And in this political influence, the subjects that influence it are the price setters, that is, the big businessmen.
Businessmen are milistas for ideological reasons and because they earn money not from merchandise, but from financial profits, from interest rates — the same process as in agribusiness. “Argentina is the new tax haven.” The business is financial, he says.
The yerba mate growers of Misiones, who are small business owners, largely supported Milei, but they are already becoming disillusioned.
See some prices charged in the country
(Average values)
1 empanada – R$ 10,00
1 chorizo steak in restaurants – R$130,00
Full menu (starter, main course, dessert and a non-alcoholic drink) R$250,00
1 box of alfajor – R$45,00
Entrance fee to Iguaçu National Park for foreigners – R$211,53 plus parking R$23,00.
Note: Values may fluctuate depending on exchange rates.
If they don't charge for health insurance in Argentina...the same will happen with the Brazilian INSS...because there will be a shortage of everything...including for Argentines...I think the right thing to do is charge for insurance to maintain a balance between income and expenses...nothing is free.
And how will Brazilians spend money in Argentina when we are in a serious crisis here…
The vast majority of the population is struggling to buy basics in supermarkets…
Earning a mediocre salary and seeing a “government” exposing its exorbitant spending and totally inefficient public measures…
In Brazil and Argentina we are following the same paths, selling and donating public assets to multinational billionaires to exploit the people. The misgovernment of Latin America follows the orders of the pigs of the American empire, which is to follow the Washington consensus, that is, to donate state-owned public water, highways, electricity, education, while China and everything state-owned, Latin America goes in the opposite direction, that's why we don't get out of the 4th underworld. There has to be a popular revolution against these bastards.
At the beginning of 2023, 1 real bought only 100 pesos, today 1 real is worth twice as many pesos (200). Before, the city of Puerto Iguazú was full of Brazilians and tourists in the restaurants. Bars closed at 2, 3 in the morning... But they preferred to fall for Milei's illusion that it would hold back inflation. There you have it... Neither Brazilian tourists, nor any tourists at all, because I've seen Americans think a bottle of beer is expensive in Puerto Iguazú.