STORY: Shoppers are no longer flocking to buy cheap imports from this once-bustling town on Paraguay’s border with Argentina.
For years, the weak peso kept prices low for fuel, medicine and groceries, all smuggled across the frontier.
But with a rare mix of Argentina’s near 300% inflation and a propped-up peso under libertarian President Javier Milei, Nanawa has become a ghost town.
Supermarket employee Raquel Alvarenga has seen it first-hand.
“It’s been quite damaging, sales have dropped by 50%.”
Other shopkeepers estimate plunges between 60 and 80% since Milei took office in December…
when the Argentine president sharply devalued the official peso currency and ushered in austerity.
Since then the peso has been allowed to depreciate just 2% per month. Monthly inflation, while slowing, has been some 10 to 20%.
That’s meant prices in dollar terms have soared.
Tourists and exporters are feeling the pinch.
In September, a kilo of beef cost around 2,800 pesos on average, or $3.70 at freely accessible parallel exchange rates – much cheaper than the $7 at Uruguay’s Montevideo or Chile’s Santiago.
Data from April shows Argentine beef prices around 6,500 pesos – nearly $7 – largely erasing the cost advantage.
Border towns in Paraguay, Chile and elsewhere have seen lower local demand for Argentina imports.
Some are cheering the shifting trend, which has also meant fewer locals making day trips to Argentina to look for bargains.
Back in Nanawa, supermarket employee Alvarenga says she’s adjusting to the lack of shoppers.
“There are quite a few changes because there used to be a lot of traffic at this time and now there is no more. Before we had to serve people outside because we couldn’t fit everyone in the store. Now we have time to drink (tea).”