Latin America: Buenos Aires Most Expensive City
Inflation spurs steep cost increase of goods and services.
BY LATINVEX STAFF
Buenos Aires has replaced Sao Paulo as the most expensive city in Latin America, according to the 2015 Cost of Living Survey from Mercer.
Buenos Aires climbed 67 places globally – from 86th place to 19th place -- due to a strong price increase for goods and services, Mercer said. Argentina’s estimated inflation rate of 27 percent this year will be the second-highest in Latin America (after Venezuela) and the fourth-highest in the world, according to a Latinvex analysis of estimates for 188 countries from the International Monetary Fund and Argentine consultancy Elypsis.
Buenos Aires is now more expensive than
Danish capital Copenhagen, according to the Mercer ranking, which includes 207
cities across five continents and measures the comparative cost of more than
200 items in each location, including housing, transportation, food, clothing,
household goods, and entertainment. It is designed to help multinational
companies and governments determine compensation allowances for their
expatriate employees.
“Caracas in Venezuela has been excluded from the ranking due to the complex
currency situation. “Its ranking would have varied greatly depending on the official
exchange rate selected,” Mercer said.
Sao Paulo still remains expensive, ranking second in Latin America and managed
to move up nine spots globally to 40th place. Rio de Janeiro,
Santiago and Montevideo round out the five most expensive cities in Latin
America for expat employees.
Most & Least Expensive Cities | |||
The five most and least expensive cities in Latin America | |||
LA |
GL |
Ch |
City, Country |
1 |
19 |
67 |
Buenos Aires, Argentina |
2 |
40 |
9 |
Sao Paulo, Brazil |
3 |
67 |
-2 |
Rio de Janeiro, Brazil |
4 |
70 |
18 |
Santiago, Chile |
5 |
83 |
31 |
Montevideo,Uruguay |
15 |
165 |
11 |
Asuncion, Paraguay |
16 |
177 |
13 |
San Salvador, El Salvador |
17 |
190 |
10 |
Tegucigalpa, Honduras |
18 |
195 |
9 |
La Paz, Bolivia |
19 |
199 |
8 |
Managua, Nicaragua |
Source: 2015 Cost of Living Survey, Mercer | |||
The full list available from Mercer |
Mexico
City also became more expensive, moving up 13 spots globally to 137nd place and
two spots in Latin America to 9th place.
Colombian capital Bogota went the other way, falling from 5th place
in Latin America to 10th place (and globally it fell 50 spots to 148th
place). No other country fell as much in Latin America.
The strong decline is likely linked to the strong depreciation of the Colombian
peso compared with the US dollar. The peso lost 9.3 percent compared to the US
dollar in the first quarter, the second-highest depreciation after Brazil’s
real, according to a Latinvex
analysis.
Meanwhile, Peruvian capital Lima remained the 8th-most expensive city in Latin America, ahead of Mexico City and now Bogota.
Panama City posted the highest increase in Latin America, moving up four spots
to 6th place, while globally it jumped 41 spots to 104th
place.
Finally, Managua ranks not only as the cheapest city in Latin America for expat
employees, but also ranks among the nine least expensive cities worldwide, according
to Mercer.
ARGENTINA: POOR & RICH
Amidst the high inflation, Argentina’s president Cristina Kirchner has created quite a stir by claiming that her country now has a poverty rate of less than 5 percent, or one of the world’s lowest rates. Her chief of staff Aníbal Fernández added fuel to the fire by saying that Argentina thus has fewer poor than a country like Germany.
Argentina
had stopped providing official poverty statistics since 2014 – the only Latin
American country to do so. (That follows tinkering with official inflation data
since 2007). Earlier this year, Economy Minister Axel Kicillof justified the lack of
figures by saying they were “stigmatizing.”
However, Kirchner’s numbers are well below estimates by the country’s Catholic
Church,
largest labor union and others, who place the real poverty level at between 25 and 29
percent.
Meanwhile, Kirchner’s own official wealth grew 16 percent last year to $7.1 million, according to local media reports based on her reported data.
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