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Inflation-hit Argentineans line up for eight hours to shop in Chile

Prices for goods including clothing and electronics are three times lower across the border

Cars wait to cross into Chile from Mendoza, Argentina.

Thousands of Argentinians have made use of a long weekend in the country to make a trip to neighboring Chile in the hopes of saving some cash.

Around 27,000 people from the province of Mendoza waited up to eight hours on Friday to cross into the neighboring country via the Los Libertadores tunnel and take advantage of prices that are three times lower for items including clothing and electronics.

It’s a torturous journey that has become something of a tradition for Argentineans hoping to escape the effects of the rampant inflation that has made their country the most expensive in dollar terms in South America.

Studies suggest Argentina’s CPI will rise 40% in 2016, one of the highest increases in the world

The situation for the return journey on Monday was set to be even worse with customs officers on the Argentinean side carrying out random checks on the thousands of vehicles coming back into the country.

Argentineans can bring back goods worth $150 from Chile without paying tax and are fined if they exceed that amount. The country’s customs office has already collected $4 million in fines since January and says that eight of every 10 cars returning from Chile carry more than the permitted value.

Only four out of 10 car occupants voluntarily declare the excess, however, which means more rigorous checks of vehicles and longer border delays.

The situation at the border with Chile was worse than usual over the recent long weekend, but the lines of cars passing into the country have become a regular sight.

Trade in Mendoza province fell 8.25% in September as a result, according to the local chamber of commerce, but the problems caused by inflation in Argentina can be seen elsewhere, with people traveling to Paraguay from Misiones to fill up on gas or crossing into Chile from Santa Cruz to get a new set of car tires.

Life is so expensive in Argentina that locals have become adept at finding ways to save money. But the main challenge facing reform-minded president Mauricio Macri – who came into power on the back of a zero poverty promise – remains inflation.

Life is so expensive in Argentina that locals have become adept at finding ways to save money

The consumer price index (CPI) rose 2% in July and then slid to 0.2% in August but the government admitted that this fall was the result of a Supreme Court ruling that blocked government attempts to end subsidies for gas prices. In some cases, prices had shot up as much as 1,000%.

Studies carried out by analysts suggest Argentina’s CPI will rise 40% in 2016, second only to Venezuela in South America and one of the highest increases in the world.

But there are signs the worst could be over in Argentina – at least at the macroeconomic level, if not on the street.

“Production and activity are still very low, but since August they have been improving,” said recently Diego Coatz, the chief economist for the country’s Industrial Union employers’ confederation. “We have seen the worst of this, and now the important thing is to get inflation down from 20% a year. There’s not going to be a boom, but little by little, things are getting better: we’re optimistic without losing sight of reality.”

English version by George Mills.

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