I’ve been having a rough year.
You know what they say about cost of living rising so much, you know?
Well, about a year ago, I was living in a place called Pedregal de Santo Domingo.
I’m living here now but I lived down here over a year ago also.
Back when I first lived here, I remember going to this torta street food dude who would sell his tortas at about 40 pesos a torta.
What is the price now a year later?
Well, as you can see in this photo I took a week or so ago, it’s now 43 pesos!
A total of 15 cents of increase!
Damn!
Killing my budget, are you?
Thankfully, the price of bags of chips hasn’t increased too much.
….Or has it?
Across from the torta spot is this very skinny and short woman who stands at about 4 foot tall and sells various bags of chips, drinks, etc.
When I started living here again about 2 weeks ago, the price for a bag of doritos was 10 pesos.
I’ve been buying enough of them because I find that they accommodate my chicken tortas well.
And, as a side point, I missed the chicken tortas that this specific dude above sells because he has some of the best tortas I have tried in the city.
Anyway, over the last 2 weeks, the bags of doritos have been 10 pesos a bag.
However, that all changed about 2 or 3 days ago.
Last I went there, the same price of doritos now costs 12 pesos a bag!
An increase of 10 cents in 2 weeks….
MOTHERFUCKER!
As you can see my fellow gentlemen, Latin America is getting too expensive for me!
If they keep the price increases going at this rate, I won’t be able to afford the high-quality cocaine in Polanco anymore.
Maybe Tepito?
Maybe.
Jokes aside, while the price of tortas and doritos has increased over the last year and 2 weeks respectively, it does bring us to a brief topic to discuss.
That being inflation.
Has inflation been noticeable in Mexico over the last year?
If you’ve been following US politics, you’d say inflation is an issue regardless of your political affiliation.
For example, my sister, who does not fancy an afternoon watching Mike Huckabee or reading Breitbart, has admitted that inflation has been an issue over the last year.
While she’s not a cheerleader for Biden, she does lean towards the left and has acknowledged inflation as an issue like basically anyone I have heard from that lives in the US.
What do I think about inflation in the US?
Personally, part of me wonders if it would be good for me?
My belief being that, if inflation is worse, then hopefully wages increase and, given my income is primarily online, then hopefully those who spend money on me online will have more income to spend. While that sounds counterintuitive because cost of living will be higher, I wonder if it also means that a typical American will see spending a 100 bucks like they see spending 5 bucks now. And, given my cost of living hasn’t risen, I can more easily get people to spend 100 bucks on me per transaction in the future then while still enjoying the low cost of living in Latin America.
OK, OK, I’m not an economist. Don’t kill me. Just a theory!
Still, outside of inflation issues in the US, how does it impact me?
We already briefly discussed my potentially naïve optimism about how inflation in the US could be a good thing for gringos living in Latin America but is inflation noticeable down here?
Outside of torta and dorito vendors?
Let’s discuss everything that comes to mind.
Inflation for Any Other Products?
Before we begin, let’s pull up Mexico’s inflation numbers.
Well, according to this article here, inflation is surprisingly an issue in Mexico being a “20 year high.”
Here’s a few quotes from that article:
“Figures from national statistics agency INEGI showed inflation in Latin America's No. 2 economy jumped to 7.37% last month from 6.24% in October. That compared with the consensus forecast of a Reuters poll for 7.22%.
The November figure took inflation to its highest level since January 2001.
The core rate of inflation, which strips out some volatile items, reached 5.67%.”
And, according to this other source here, Mexico’s predicted inflation rate for 2021 is 5.37% but previous years from 2017 to 2020 have had the following respective inflation rates: 6.04%, 4.9%, 3.64% and 3.4%.
That has roughly been the time that I have been in Mexico which is why I ended it at 2017.
But then we can discuss anyhow what I have seen in Mexico.
Any inflation examples over the last year?
Well, yes but not really.
Keep in mind though that I don’t spend too much money in Mexico.
I’m not rich in Mexico by any means living on roughly 400 bucks a month.
I could spend more but I’m not a millionaire by any means and I generally am content living on little.
And, being honest, that 400 bucks a month gets me basically the same standard of living that I’ve always had living in Mexico at around that spending.
In my 4.5 years living here, I’ve always spent roughly 300 to 700 bucks a month depending on which neighborhood I’m living in.
Right now, I live in a neighborhood that has no tourist value whatsoever and that, in large part, explains the lower cost of living than 700.
Still, even when I lived in Roma Norte not too long ago, my cost of living then wasn’t really any higher to me than when I lived there for the first time ever in my first year in Mexico City.
In short, when you look at the broad numbers, my cost of living hasn’t inflated whatsoever.
In fact, nothing really looks that different to me.
Sure, the torta guy near me charges 3 pesos more for his chicken tortas and the lady charges 2 pesos more for doritos.
If you go to OXXO, getting a 600 mL of fuze tea is maybe 4 pesos (20 cents) more than what it was 4 years ago.
Finding street tacos that still offer 5 small tacos for 25 pesos is more of a challenge (now many offering the same deal for 30 to 35 pesos) unless you go into neighborhoods like Pedregal de Santo Domingo where 25 pesos is still the norm…
And, for those who like American food, I can tell you that the offer of 10 chicken nuggets is now for roughly 55 pesos more or less instead of the cheaper offer of around 35 pesos a few months ago…
Beyond all of that, I can’t think of too many examples of “inflation” being noticeable.
My haircuts still cost 50 pesos a haircut.
Cheap shoes sold on the street still go for 190 to 250 pesos a pair.
Laundromats don’t cost anymore really.
When I go to the grocery store, which isn’t always often, I haven’t noticed the price to be significantly more than what I would pay before.
Though, when it comes to black tea, I have noticed the price of tea gone up at about 25 pesos a box to 31 as of recently at the grocery store.
That’s about 30 cents of an increase per box.
And what about rent?
That’s a funny one.
When the Covid recession started, a lot of people left the city initially and rent went down noticeably.
Well, when I say noticeably, I mean like 50 dollars cheaper for the same place noticeably.
You weren’t going to save millions of dollars.
A price difference only noticeable to a local Mexican on a salary of 5,000 pesos mensuales.
However, given the influx of foreigners escaping Covid restrictions into Mexico and other folks returning to Mexico City, rent has gone up a tiny bit since the drop.
But, if I’m being honest, it really hasn’t been that noticeable to me since, at the end of the day, I earn USD and the difference in USD just isn’t that noticeable when you talk either about that initial drop or the recent increase.
And, if you haven’t noticed by now, that’s a reoccurring theme when you talk about inflation in Mexico.
The Gringo Who Notices Little
Granted, you might argue that I notice a lot if I’m citing specific numbers like 25 to 31 pesos for black tea or 40 to 43 pesos over a year when it comes to torta prices.
All of those numbers being real by the way!
My memory is good sometimes.
Still, while I do notice details like that, they don’t bother me much at all.
Do they bother Mexicans?
I have no idea.
I have a few Mexican friends who make a decent amount of money.
Among the other Mexicans I speak to daily, I don’t ask them “how is inflation affecting your budget?”
And I don’t live in the nicest of areas – maybe it does affect them!
I just don’t ask because it’s a private matter to them personally.
Still, when it comes to me, I think you get the point by now.
I make USD. I spend in pesos. Therefore, the price difference just isn’t that noticeable.
Even when the lady wanted to charge me 2 pesos more after only buying her doritos for 2 weeks, it didn’t bother me because I wasn’t worried about it being a bullshit case of gringo pricing.
She had written a sign down expressing the price difference of 2 more pesos for different bags of chips on sale.
So I assume the price really did increase but who gives a fuck if it was gringo pricing or inflation for that specific case?
It’s 10 cents.
Who gives a fuck?
And you could say the same thing about any other example I gave today.
3 peso or 15 cent increase for chicken tortas over a year.
4 peso or 20 cent increase for fuze tea after 4.5 years.
20 peso or 1 dollar increase for Burger King chicken nuggets over a few months.
6 peso or 30 cent increase for black tea at the grocery store over some months or whatever.
A 50 dollar drop in rent then a 50 dollar increase a year later.
So on and so on.
If I had to live on 400 bucks a month and was struggling a bit more, then I would care.
But, while I am comfortable spending little to live, I at least feel enough leg room to not care about the 10 cent price increases in basic stuff.
And that’s really a detail to bring up when discussing the gringo experience with inflation in the country.
I obviously can’t speak for Mexicans. Only for myself.
If I was still living on tighter ropes when I lived by Cuatro Caminos for example on a 300 dollar budget when I had to live on that instead of it being normal covering what I needed, then these price increases would mean something to me.
I remember those days when I was very strategic about what food to buy to last me the longest and what deals were available.
Nowadays, while there isn’t much of a difference between 300 and 400, it should also be said that 400 is just a number.
Like I said, there’s extra leg room where I can spend more if I needed to and so those 10 cent differences aren’t going to make me sweat thankfully.
And, if we’re being honest, more gringos aren’t living like that in Latin America or Mexico specifically.
Most are spending at least twice that I imagine if not more to live here.
So I imagine those price differences of 10 cents are even less noticeable to them but I can’t speak for them anyhow.
But that brings me to one last topic to discuss.
Another Benefit to Latin America?
Is this just another benefit to living down here?
Well, as we know in the case of Argentina or Venezuela for example, inflation happens down here also.
And, if inflation worsens in the US, it does hurt the value of the dollar obviously.
But it does make me wonder...
At least in my experience so far, it feels like another benefit to living down here.
I don't experience really the higher costs of food and other things like gas (not necessary to drive down here though) in Mexico versus back home.
The issues of inflation that my sister talks about are not really noticeable to me down here.
Will it always be like this?
Can the dollar, even if it devalues due to inflation, always have the edge over Latin American currencies where inflation back home doesn't really impact cost of living down here with the exchange rates at the ATM at the end of the day?
So far, that is the case.
Life not impacted by this inflation up there so far.
But, being that I'm not an economist, I can't tell you how it'll play out in the long run.
I don't know.
But, as of right now, it's turning out to be a benefit given I don't have to deal with that shit up there by living down here.
Let's wrap this up now.
Anything to Add?
Anyway, that’s all I can think of when discussing what I have seen when it comes to inflation in the US.
The only times I have ever noticed noticeable inflation examples in Latin America, outside of Mexico, were my time in Argentina as you can read here and my very brief time in Venezuela here.
Outside of either example, inflation in Latin America has never been a big topic to my life down here.
As I hinted at, I think, for the average gringo spending USD in pesos, it’s not as big of a topic for us usually but it can be for the individual depending on their specific circumstances.
Anyway, that’s all I got to say.
Got anything to add?
Drop a comment below in the comment section.
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Thanks for reading.
Best regards,
Matt