Last week Kiss said goodbye to the Argentines for the second time. Some 45,000 attended the recital. This, which represents the closure of one of the most important rock bands in history after playing for 50 years, is also a mirror of the dual behavior of Argentines. With falling consumption, loss of purchasing power of income, inflation and devaluation of the weight on the rise, up to $50,000 per ticket was paid to fire them.
Economic agents are the protagonists and responsible for economic activity. Have an activity and consumption that begin to slow down. People choose or give up on their choices. The choice is very clear on the part of Argentines in the current context: escape the “Argentine peso”.
For many Argentines, the closest refuge to escape the peso is to exchange them for mass consumer goods (food, beverages, cleaning and personal care items) in the supermarket gondola, for others who have spending surpluses to dedicate to savings, they go to the dollar.
Get rid of the weights and enjoy
But for the vast majority who are in this second circumstance “saving” doesn’t make any sense. They find neither the mechanism nor the incentive to do so, which is why they “advance future consumption in the present.” They live post-pandemic life from the social and also they get rid of the “weight” from the economic point of view enjoying leisure, entertainment and recreation today before the instability that our economy offers to think about a good like a car or a house in the future.
Each family is subject to a budget limited. Argentines with an average salary, instead of concluding a loan to have a private home, are in search of immediate gratification Making your present preference generate higher returns in the face of uncertainty about the future.
In our case, Argentines who could have the possibility of saving with an average salary among tangible goods (a house, a car, a cell phone, among others) are choosing the goods of an intangible nature (a recital, a gastronomic outing, tourism, among others). If we take as reference the average ticket value to a recital in 2019 ranged between $2,560 and $3,467 in the case of international and national recitals respectively. By 2023 the increase has been considerable with an average ticket worth $26,800 for international recitals and $14,649 for national ones
Dollars for each type of consumption
Just as Argentines have suffered higher costs and taxes for access to foreign services through the trap created with card dollars (netflix payments, game apps, music downloads, etc.) or the hyper trap of the tourist dollar (payments travel and services abroad) This same logic has not escaped for cultural services imported from abroad for domestic consumption llámese rock & roll bands like Kiss or Red Hot Chili Peppers.
For these consumptions, there was also room for a new exchange rate: “Cultural” or “Coldplay” dollar which implies an official wholesale exchange rate plus a 30% higher price to settle the services in dollars of the Artists who come to Argentina and that the Argentines pay more expensive in pesos to settle this operation and contracting.
From 2019 to date, the value of national tickets evolved on average 322% while international ones did 946%. with an average accumulated inflation for the same period of 648%. The tickets for the national recitals on average increased less than the average accumulated inflation of the period and their presences increased in volume of attendees. International recitals with “cultural” or “coldplay” dollars are almost 50% above accumulated inflation for the period. However, attendance and sales continue to be record.
Present consumption is going strong
When faced with dilemmas, rational people value the consequences of that choice in a more or less conscious way, making a cost benefit analysis of each alternative.
In our case, It would be to think about whether to dedicate the pesos to savings or allocate it to services such as gastronomic. Explicit costs imply a monetary outlay, in our case going to a restaurant, bar or cafe, while implicit costs are not associated with a direct monetary outlay, but rather with the opportunity cost, with the income that would be obtained in the best alternative not chosen. . In our case, the middle class today prefers spending over saving in a currency like the peso that has no efficient destination for future consumption.
The present consumption has more value than the future. In the case of gastronomic activity and restaurants, according to the Monthly Estimator of Economic Activity, the Hotel and Restaurant Sector in its latest report showed a percentage increase of 8.6% compared to the same period of the previous year. For its part, the price variation of the sector for the first quarter of 2023 was 23.18%. Although it was above the average for general inflation in the accumulated, the activity is sustained despite the crisis.
This item, despite having accumulated increases of more than 700%, the gastronomic activity had growth in its activity and sustained over timethus showing improvements of between 10% and 20% per month since the beginning of the series, as shown by the INDEC’s Monthly Estimator of Economic Activity (EMAE).
Spend the pesos on tourism
the item turismo It has also been a box of surprises. The long weekends They have become moments of calm for the upper-middle-class sectors that used to go abroad but now, with the taxes incorporated into the trips, have secluded themselves in local destination options. In turn, the traditional middle class prioritizes enjoyment and sporadic rest over traditional 15-day vacations. For its part, the lower middle class has been able to access through Pre-trip plan in 2022 and in 2023 for little substitute weekend getaways for the vacations they could no longer have.
Analyzing tourism spending, specifically in carnival 2023 based on the survey carried out by CAME, direct spending on carnival tourism increased by 131% nominal and 15.3% real in relation to carnival 2022.
The average spending per day of a tourist increased by 128.6% in one year, exceeding the accumulated inflation of the period. On the fourth long weekend of the year for Labor Day, some 920,000 tourists traveled through Argentina and spent $29,109 million in food, beverages, lodging, transportation, recreation, and various purchases. Total spending, at real prices, this time was 4.9% higher than in 2018. The increase is based on the growth in the supply of recreational, cultural and gastronomic services in cities. Tourists spent, on average, $11,300 per day each, 22.2% more than in 2018 compared to real prices, and the average stay was 2.8 days.
It is important to take into account that the national government also had a hand in configuring these data, since in the midst of a crisis, in general, it stimulates programs such as pre-trip, which generates vertical linkages of these sectors, such as tourism and gastronomyare some triggers for artificial improvements in these sectors.
The Argentine economy teaches us the following: suppose that in March 2022 you put the pesos you had to save to go see the Kiss recital today. In short, in real terms, you would have lost money because the return on the fixed term in that period was 98%, accumulating principal plus interest, while inflation was 104% for the same period. The cost he would have paid to save would have been very high. Better treat yourself today. But beware that without savings there is no investment or generation of wealth or improvement of future well-being
We live on the stick. We live like rock. We live in the “Kiss Economy” of which Gene Simmons gives us a chair in his following reflections “The root of all evil is not money, but not having enough money.” He understands economics more than the current government about the ills and fundamentals of inflation and the problem of income. In turn, he adds: “If you are building a house, or doing anything, what you need is time. Well, you need effort, but you need time. The more time you put into something, the better it will be” he knows about the cost of time, the effort of work and the generation of wealth. On his part, he also talks about the aspirational “Live and think like a pauper and you will always be fine.”
We have run out of currency We have not consolidated a long-term economic policy, political decisions are ephemeral in search of electoral flow so as not to add value to the use of time but to speculate over time taking present value for lower value and higher cost to pay in the future. future. “Kiss Economy”
