La Derecha Diario After the removal of the restrictions, a historic drop in relative prices was recorded.
Data shared by economist Alberto Cavallo reveals a price readjustment in the Argentine economy
The elimination of currency controls in Argentina by the government of Javier Milei not only did not affect inflation but also triggered an effect on the relative prices of key goods.
According to data shared by economist Alberto Cavallo, a prominent academic and researcher, the PPP (Purchasing Power Parity) index produced by his consulting firm indicates a notable drop in local relative prices, which represents a significant change after years of distortions in the domestic market.
This index, which compares prices of thousands of identical products such as electronics, food, and fuel across different countries, reveals that the cost of that basket in Argentina is currently 1% lower than in the United States when measured at the official exchange rate, now without currency controls.
Within the categories analyzed, electronic products remain the most expensive, although they have undergone a sharp correction. Since January 2025, the price gap with the U.S. has narrowed by 25 percentage points, although they are still 52% higher. This behavior reflects a gradual normalization in sectors that have historically been protected or affected by high taxes and trade barriers.
In comparison with Brazil, the trend is also striking. The relative prices of identical products have fallen by more than 20 points since the beginning of the year, and currently that same basket of goods is 3% cheaper in Argentina than in Brazil, falling below the historical average recorded since 2016.
These movements demonstrate a realignment in the Argentine economy, where domestic prices are beginning to reflect international dynamics to a greater extent, something that for years was distorted by capital controls, subsidies, and multiple exchange rates.
Since taking office, Milei's administration has been carrying out market deregulation, economic liberalization, and the elimination of capital controls, key elements that make this price realignment possible.
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