Argentina is struggling with significant economic challenges which has led to a big drop in the value of the country’s currency, the Argentinian peso, hitting consumers’ pockets hard.
According to a report by Focus Market Consultancy, tracked sales of cosmetics and personal care items fell by 12% in the month of July, with imported brands impacted the hardest because they are struggling to remain price competitive.
Downward trend in consumer spending
Similar declines were also reported in other consumer categories, with food sales down 11.9%, drinks showing a 9% decline and sales of cleaning products falling by 18%.
The statistics are part of a marked downward trend in consumer spend as prices have continued to rise over the course of the last 18 months, but underscore a more pronounced decline in the most recent data.
With consumer spend in the country already stretched to the very last peso and further price increases expected to hit the market throughout the month of August, experts are predicting that the situation could only get worse.
Can the situation be turned around?
Some of the country’s economists have pointed to President Mauricio Macri’s economic policies for the decline in the country’s economic output and the currency devaluation, and underscoring this, the Argentine Peso has been the worst performing currency in the world this year, falling another 20% in the days since primary election results pointed to big gains for the left-wing political opposition, led by Alberto Fernandez.
In response to the primary results President Macri announced a plan to ease the economic pain being endured in the country, which included a list of measures such as freezing fuel prices for 90 days, tax breaks and a higher minimum wage.
Whether or not these measures translate into an improved spending power in the short-term seems to be a big challenge, particularly as consumer prices have continued to rise sharply, so with a general election about to happen in October the current government will have a lot of work on its hands.