“Although Christmas sales have growth prospects of 11% year-on-year compared to a fall of 10.2% last year, according to the CAME, Christmas Tree gifts have had a price variation well above the salary in Argentina. In the case of unregistered or informal wages, the loss of purchasing power has been very large. Behind this universe are monotax payers, full informal but also self-employed who pay income tax with a limit lower than a total basic basket measured by the Indec in $ 72,000 “, indicated Damián Di Pace, director of the consulting firm Focus Market.
One of the variables that must be taken into account to measure purchasing power is the salary level in real terms, that is, to take into account the nominal salary discounting the effect of inflation and for this we are going to take 2 types of salaries: Registered and No Registered.
For example, if in 2017 the salary of a registered worker could acquire 432 Duravit Trucks (National Toy) by adjusting the salary level and when buying the same toy in 2021, they will only be able to acquire 340 units with that salary. That is, during a period of 5 years, the salary lost the purchase of 92 toys.
This question becomes even more complicated when buying 1 imported toy (Lionels Water Park). If a worker with 1 Unregistered salary bought this toy in 2017, he would obtain 11 toys, but if the salary level is adjusted in conjunction with the price of the toy (inflation in 2017 was 24% while at present it is around the 52%) in 2021 they can buy only 8 toys, that is to say, in time they lost the purchase of 3 toys.
imported toys Focus Market wages.png
“Argentines continue to lose purchasing power in the face of inflation and need to finance themselves with a credit card to cope with the amount of gifts that Christmas involves. Faced with the potential rise in the interest rate of the BCRA, there are opportunities to do so at low cost in the face of inflation, but it is also a dangerous instrument in the face of the increase in debt with income that does not have much more room to support the accumulation of a greater liability with respect to of the current spending needs of middle-class families, “said Di Pace.
Let us also remember that in the Christmas season this situation of loss of purchasing power is even worse when buying gifts, where for example if you want to buy a Toy such as a 3-wheel Scooter with a cash cost of $ 8,549, A person could be financed to obtain it in three ways: Through the Now 12 plan, where they would pay fees of $ 904 (final cost $ 10,857.23), through a department store card with fees of $ 1,067 (final cost $ 12,804.69) or with a personal loan with installments of $ 1,441 (final cost $ 17,298.05); that is, when a person distributes the price of the toy in installments this has to do directly with the Total Financial Cost CFT (real cost of the loan) where the best choice is always the one with the lowest CFT compared to inflation.
toys financing Focus Market salaries.png
Source From: Ambito
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