Argentina: Country Pulse (April 2010)
Hot topics in April 2010:
- The World Cup plus more credit equals record HDTV sales;
- One credit card for every two Argentineans;
- Welfare for poor people might reduce poverty by one third.
The World Cup plus more credit equals record HDTV sales
The World Cup and the sudden emergence of payment offers featuring 50 interest-free payments have increased HDTV television sales in Argentina. In March, a record 70 thousand units were sold, surpassing last December’s historical record of 47,000 units.
“Sales shot up and exceeded expectations before the World Cup has even started, and everything shows the trend will continue”, explained Juan Manuel Aragones, Director of Garbarino, a retail chain store that specialises in Consumer Electronics, to La Nación newspaper.
Another retailer, Ribero, added that the promotion of 25% discounts offered since March by the stores has boosted sales even more.
However, for the consumers quoted by La Nación, the main reason had to do with the credit expansion: “With 20% annual inflation, the sum I will have to pay in three years will probably be ridiculous, which is why I made up my mind to buy two LCD television sets”, said Fabián Guzmán, one of the chain’s employees, who lives in Avellaneda, south of Buenos Aires.
Historical record: one credit card for every two Argentineans
In contrast to what is happening in Mexico, where consumers want to pay off their debts as soon as possible and get rid of their credit cards, in Argentina, more and more people want credit cards. “The local finance system currently has, for the first time in history, one credit card every two Argentines”, announced the financial newspaper El Cronista.
Indeed, Euromonitor International data shows that in 2009, there were 23,700 million credit cards in circulation in a population of 40,338 million people.
“I asked for the card because the bank offers discounts of up to 50% in restaurants and I could buy a refrigerator for only 70% of its value; the money I save is much more than what I spend on its maintenance”, explained Mariana, a 33-year-old housewife, first time owner of the plastic card.
For El Cronista, most new cards were issued by private banks of Argentine capitals, such as Banco Galicia and Hipotecario, amongst others.
In October 2009, the Argentine government launched the so-called Universal Child allowance, a monthly benefit of 180 pesos (US$46) for each child under 18 whose parents are unemployed.
The money transfer began in November and five months later many investigations have noticed a real reactivation in the consumption of the lower sectors of society, and a significant reduction in poverty.
An investigation by CONICET, the most prestigious scientific investigation centre in the country, assured that the programme will reduce the amount of poor people in the country by 30%.
The government affirmed the results are similar to the ones of the Bolsa Familia (Brazil) and the Oportunidades plan (Mexico), which managed to significantly reduce extreme misery in the past decade.
But the most important detail, the specialists confirm, is that it is strongly modifying the way poor people live, for, in order to get the money, the children have to go to school and go for hospital check-ups at least twice a year.
The signing up for schools “increased 20% this year”, assured the government. In the most destitute areas of the country, the sales of basic foods grew between 10% and 20% during the first months of 2010, informs a report by the CADAM, the chamber that unites small stores and supermarkets.