In a small barbershop in Buenos Aires

The hand-written entries in the two dozen notebooks – date, haircut, price – chronicle decades of a Buenos Aires barber’s working life. But they tell another story too, Argentina’s most important: a tale of 19,900% inflation and its crippling impact.

In his shop with sandy wooden floorboards and a fishbowl glass window to the street outside, Ruben Galante has for some four decades watched presidents come and go, myriad economic crises, and fast-rising prices.

The 67-year-old has jotted down every haircut for over 20 years, a rare personal history of the ebbs and flows of inflation during a period of patchy – and at times unreliable – official data.

Galante’s colorful lined notebooks, tucked away on a small shelf in the corner of his store, show that between 1991 and 2023, haircut prices rose from 15 pesos to 3,000 pesos.

And the current term of center-left President Alberto Fernandez has seen the fastest price rises of any administration during those three decades – some 757% since he took office in December 2019, according to Galante’s notebooks.

“This is a long, long crisis and it’s constantly getting worse,” Galante told Reuters in his store. “It’s leaving us impoverished.”

Inflation is by far the top concern for voters ahead of an Oct. 22 general election. At 124% annually – the highest level since 1991 – it’s driving the rise of a right-wing radical, Javier Milei, who wants to scrap Argentina’s peso currency.

Some economists estimate inflation could end the year near 200%. As prices have sped up, Argentina is suffering a painful cost-of-living crisis that has left four in 10 people in poverty.

Galante is worried about his adult children, a son in Buenos Aires and a daughter who moved overseas, part of a brain drain of young Argentines looking for better opportunities.

“My son has a music academy and he’s always working flat out and he still can’t buy a property, he can’t buy a car,” he said. “He works so much but the money just doesn’t last.”

‘Pesos melt away’

As a young barber, a 26-year-old Galante first rented his store in the leafy neighborhood of Belgrano in 1982, the last year of military dictatorship. Three years later he bought the shop with help from the bank.

The early years were a blur of shifting politics and economic crisis as the country returned to democracy but spiraled into hyperinflation by the late 1980s when dizzying prices could change several times daily.

That stopped in 1991 when the government of Carlos Menem pegged the peso at one-to-one with the dollar.

Galante recalls setting his price at 15 pesos, which he would maintain for over a decade.

As a twenty-something-year-old in the cosmopolitan South American capital Galante was comfortable. A price of 15 pesos equaled $15 with the currency peg. Argentina, a century ago a global economic power, was still one of the region’s wealthiest.

He recalls popping to the cafe next door for several coffees a day, traveling, dining out and restocking his barbershop equipment regularly. Now he’s far more careful.

Galante’s per haircut income has dropped in dollar terms to some $4 now at the parallel exchange rates most Argentines use.

“My purchasing power was much higher in those years with 15 pesos than it is today,” he said, adding as an example that his income from one haircut now could not even buy a mozzarella pizza. “Before you could get five.”

Years of economic decline have eaten away at Argentines’ income and savings. The wealthiest try to save funds outside the country in dollars to escape inflation and currency devaluation.

Down to zero

The peso in its current form came into being with the Currency Board peg in 1991, after half a decade of the ‘austral’ that ended with hyperinflation during the last years of Raul Alfonsin, the icon of Argentina’s 1983 return to democracy.

“With convertibility, inflation went to almost zero,” Galante said.

But the peg came with a cost: it weakened the country’s ability to pull its own monetary policy levers and linked its fate more closely to the financial health of the United States.

Pressure started to build in the late 90s as overspending ballooned and unemployment spread, ending in the major 2001-02 economic crisis under President Fernando de la Rua.

By late 2001 angry Argentines were calling on the president to quit and staged a run on banks as they tried to withdraw deposits after the infamous “corralitos” where the government seized savings. On Dec. 20, 2001, de la Rua fled the presidential palace by helicopter.

The peg undone, inflation made a comeback. Pressure built on Galante to update his prices, though hardship facing his clients meant raising them too quickly would mean losing business.

“Costs started to rise faster and faster,” he said.

Keeping up with inflation

In 2005, under President Nestor Kirchner (2003-2007), Galante raised the haircut price for the first time since 1991, from 15 pesos to 18. It rose a total of 53% during Kirchner’s term.

Divisive populist Cristina Fernandez de Kirchner, Nestor’s wife and for years the most powerful political figure in Argentina, took over. In her first term, the haircut price rose 117%, speeding to 200% in her second term.

In 2015 market-friendly businessman Mauricio Macri came into office pledging fiscal responsibility. He made some reforms investors liked, but the economy started to crumble anyway and he was forced to seek a $57 billion International Monetary Fund (IMF) loan in 2018. Haircut prices rose 133% in his four years.

That’s soared far higher now. The largest local bill – the 2,000 peso note – no longer covers a simple trim.

Galante’s price rises run well behind general inflation and the gap has grown in recent years, an analysis of official inflation data shows.

Since December 2016, utility costs have been held down somewhat by government subsidies, as have bus and train fares. Clothing, home equipment and groceries have climbed faster, while the biggest jump has been in healthcare.

In his barber shop drawer, Galante pulls out papers with years of his healthcare bills. The earliest health insurance bill he has was 798 pesos in 2007 since it has hit 142,636 pesos, outstripping his haircut prices.

“I don’t even try to keep up anymore,” he said with a resigned shrug, explaining that he had to make sure his regular customers weren’t being priced out.

With the election just around the corner, Galante was cautious. He liked the rhetoric about shock therapy for the economy by surprise frontrunner Milei but said he was worried about the libertarian’s aggressive personality.

He said he would likely vote for mainstream conservative Patricia Bullrich over ruling party economy chief Sergio Massa. All three offer very different economic plans.

As Galante cut the hair of one regular customer, Luciano Muñoz, 46, the conversation was mostly about soccer – the other passion in the country of Diego Maradona and Lionel Messi. But talk nearly always came back to the economy and inflation.

“Argentina has a way out of this, the way out is political,” Galante said. “Our country has resources, it has many things to be able to be better, but it seems no one can agree on a model of how to get there.”