Argentines ditch dining out as Milei’s policies strengthen peso

In Javier Milei’s Argentina, cooking at home never made more sense.

The president’s self-titled “shock therapy” of economic policies are making the country’s currency so expensive it’s doubled dinner tabs at restaurants that boomed not so long ago when bargain prices defined nightlife in Buenos Aires. Those times, driven by unsustainable policies that pushed Argentina toward the brink of a full-blown crisis, are gone since Milei took office more than a year ago.

It’s one of the most tangible changes to life in Argentina, a country famous for packed steakhouses by day, buzzing bistros by night and dance clubs that don’t open until 2am. Locals and foreigners alike are cutting back on going out as Milei’s policies have paved the way for the world’s second most expensive Big Mac (US$7) and Latin America’s priciest cup of coffee (US$3.50).

“I’ve become much more cautious about dining out because nowadays, you can easily spend US$50 on a milanesa with arugula — when just last year, that same amount covered dinner for my husband, our three children, and me,” says Belén Triemstra, 43, a history teacher at a Buenos Aires high school. “In 2023, we used to go out to eat once or twice a week. Now, I prefer to order food at home.”

Triemstra is living Argentina’s new reality under Milei. The difference between restaurant inflation and price hikes for groceries has never been greater.

Years of high inflation and currency controls gave Argentines the feeling that spending pesos quickly was more rational than saving. But in 2024, the Argentine peso was one of the five best-performing currencies around the world when adjusted for inflation, gaining more than 40 percent against the US dollar, according to data compiled by Bloomberg.

Milei scrapped price controls that kept food costs artificially low, but he tightened government controls on currency trading and, in the process, strengthened the peso so much that many economists say it’s now overvalued. He’s also scrapping some subsidies on utilities, forcing restaurants to pass on the cost of price hikes on electricity, gas and water, going as high as 50 percent in the past year.

“We are twice as expensive compared to last year,” says Gastón Riveira, owner of steakhouse chain La Cabrera in Buenos Aires. “Foreign tourism, which represents the majority of our clientele, has dropped by 20 percent compared to 2023.”

While restaurant prices are up 100 percent from a year ago, grocery tabs have only gone up 65 percent, below headline inflation. Even on a monthly basis, the cost of eating out rose three times compared with bills at supermarkets and fruit stands in January. Although Argentines know inflation all too well, the difference this time is that prices go up while the exchange rate stays nearly flat.

Gonzalo de la Vega, owner of craft brewery Club Bonpland in the affluent Palermo Hollywood neighbourhood of Buenos Aires, has reached a breaking point. The brewery’s utility costs have tripled, a result of Milei’s decision to cut subsidies that kept monthly bills cheap.

The 39-year-old restaurateur tried to avoid passing the price hikes entirely onto his menu and took a 25% hit to his profits. But last month, his landlord informed him that his rent would more than double.

De la Vega is now planning to close the brewery. “Customers used to come to eat, everyone ordered plates and drinks, then went out to dance,” he says. “Today they only go out to drink something. Consumer spending tanked.”

Before Milei took office, high inflation and a big gap between Argentina’s many exchange rates meant that pesos were rapidly losing value, fuelling a culture of fast spending and fierce competition for reservations between locals and foreigners.

Now there’s a much smaller gap between exchange rates, an improvement that foreign investors welcome but it wipes out the dinner tab discount savvy consumers enjoyed. And while price increases are cooling, menus have become much more expensive in dollar terms.

With the peso no longer in free fall, households are cutting back on discretionary spending, and restaurant owners are feeling the impact. Argentina has lost more than 10,000 restaurant and hotel jobs since Milei took office, according to government data.

“January and February were very bad months. We sold 30 percent less in January and 12 percent less in February than last year,” says Víctor Blanco, a partner at restaurant chain Buenos Aires Grill and Puente in the more affluent neighborhoods of Buenos Aires. “Nobody stayed in Buenos Aires because many went on vacation abroad. In other years, that didn’t happen.”

Argentines spent US$645 million on payments abroad in January, the highest since 2018, according to the country’s Central Bank. Nearly two million Argentines travelled out of their home country that month, more than triple the number of foreign tourists who visited Argentina and up 73 percent from a year ago, according to government data.

Restaurateurs point out that the previous government’s economic policies created a façade of world class meals for US$30 a person, surreal prices for some of country’s most famous restaurants.

“We were coming from rock bottom prices. That was an extreme situation,” says Blanco, the restaurant owner. “Meat is still cheap relative to the rest of the world. It had to level out a bit.”