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.
Now Nanawa is a ghost town, with prices of the contraband pushed up steeply by Argentina’s rare mix of near 300% inflation and a propped-up peso that has even rallied against the dollar in widely-used parallel markets under libertarian Prez Javier Milei.
“Before, things worked very well, we sold everything,” said Marta, 57, a pharmacy employee in Nanawa. “Now there is nothing left.” Shopkeepers in Nanawa estimated that sales had plunged between 60-80% since Milei took office in Dec when he sharply devalued the official peso currency and ushered in austerity. 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.
In Argentina, products like olive oil and toothpaste are becoming small luxuries. Colgate toothpaste is priced at 4,976 pesos or $5 for a single 90g tube, twice what retailers charge in Paraguay and Uruguay.
