k374

I am in Chile right now and the prices here are on par with the US and many times even exceed the US. For instance I went to Viņa Del Mar today, to a Mexican restaurant that was rather ordinary and the burrito was $17 In Valparaiso, a local fast food chain wanted $8 for a simple hamburger and then when I asked if fries came with it they said it's $3 extra for fries ...... all the prices in the other restaurants were the same.

I have heard prices in Brazil are even higher which I really can't fathom... I am going there in a few weeks.

When I checked the stats:

per capita GDP of the United States (2010): $47, 275
per capita GDP of Chile (2010): $11,929
per capita GDP of Brazil (2010): $10,471

how can such price levels be explained, how is it sustainable and how do people survive there?

In another comparison, Bolivia, has a per capita GDP of $4,700, but everything there is about 10-15% as expensive as the US... it's more realistic. For instance, I got a great private room in La Paz, Bolivia in a nice hotel for $8/night!! LOL!

obscure2k

Moving thread to the FT South America Forum.
Obscure2k
TravelBuzz Moderator

Gaucho100K

Without getting into complex Economics, Monetary and Exchange Rate theories... I will just say that perhaps you should be asking yourself why the US Dollar has become such a relatively weak currency....

Check the stats on the nominal USD prices for similar goods & services (and GDP stats) some 10 years ago and you will see what Im talking about..... and, while you are at it, perhaps you should talk to your financial advisor about that 401K and nest egg you have and what currencies the assets are tied to....?

rajuabju

$ is weak.

Plus, you are probably in all the touristy places that love to charge tourist prices.

TA

Even aside from the US - <xyz> exchange rates issue, it's a good question that I've wondered about. For example, in Turkey/Istanbul: the cost of public transport even for locals is approximately NYC-level prices, yet their relative income level is as you say, in the low $10,000/yr. How can they afford this? Or is the economy that segregated?

k374

nope, restaurant full of locals...not a single tourist in sight, at least nobody from the west. A lot of backpacking type tourists don't come here for obvious reasons They go directly from Bolivia to Argentina.

EricTheNerd

There very well could be a high disparity between restaurant prices and food (supermarket) prices. I know this is the case in places like Scandinavia. Chileans (and likely Scandinavians) probably don't eat out much compared to Americans, where the price disparity isn't as stark, and certainly not as much as visitors/tourists, who find the vast majority of their meals in restaurants.

Or maybe Chileans REALLY like Mexican food?

Rushfan1

Brazil has become so expensive in the last several years because of:

- USD devaluation (encouraging importing of goods)
- Real appreciation (killing export of goods)
- inflation
- high personal debt driving up demand

For tourists, Brazil is 4 times more expensive now that it was 7 years ago.

Eastbay1K

Mexican food in Chile is a rare, imported and not very delicious item. Every year (at least once a year) I bring a friend down there refried beans in a can, and perhaps some other item, like chile in adobo sauce. There are a few things going on - the economy is strong, inflation has been higher than in the US over the past 10 years, and the US$ is in the tank. On my "peak" exchange trip in (probably) 2003 or so, I was receiving almost CL$750 for US$1. Fast forward to now at $460 or so, plus inflation, and it is a much more expensive place.

There is still plenty of "affordable" food but you aren't going to find it in the better neighborhoods or in touristvilles. Unless you can live on mote con huesillos and not vomit, you will spend a fair amount of money on food. On my last trip, I ate at a modest parrilla in the centro, and prices were fair, including the house pisco sour (Capel) at under $1.000. Modest end acceptable wines (i.e., not Gato) were reasonable. Meat dishes were reasonable. Nothing was cheap.

I can't even imagine Brazil right now. I was last there 6 years ago and it was already getting expensive at $2.20 to $1.

SJOGuy

Plus, the restaurant is not charging you "$17" for a burrito. It's charging you X number of pesos. If that's what the dollar price turns out to be for you it isn't really the restaurant's doing.

bebert

Transportation cost is mainly driven by
- energy cost: pretty much everywhere the same if based on petrol price (electric cars/busses are still far away)
- infrastructure cost: train, railways are made by few suppliers (changing as more and more chinese products arrive) priced at same price everywhere in the world whatever GNP/cap is in the country. Ex : a plane made by Airbus/boeing is sold roughly the same price to American airlines or Birman airways. average seat price is reflecting this as cost of plane is a major part of flight ticket, as fuel

Final cost to consumer is differientated in many cases by level of public subvention, directly by lowering final price by law, either by subsiding the energy cost as a vital social parameter

Gaucho100K

Sorry... but I think you are missing one huge and important point... public transportation costs are hugely influenced by subsidies... in many countries the price has zero connection to the actual cost, its a political issue and part of a larger economic policy. Oil prices are also a bad benchmark, because in some countries Oil is a State owned thing and therefore prices of gasoline and other fuels are also not pure market price..... a good example of this is Mexico, Iran and Venezuela also come to mind.... its not a simple and lineal thing...

Eastbay1K

A friend's simple little apartment in the centro of Santiago (a tiny one bedroom one bath, little kitchen, in a safe building with doorman in an ok enough neighborhood) costs him approx. US$200/mo. Public transit within the city is in the US$1 range per ride. A burrito is US$17.

EricTheNerd

That's an interesting rent/burrito price ratio (~12). If my rent was based on local burrito prices, I'd only be paying $60 a month! But if burrito prices were based on my current rent, each burrito would cost about $120!!!

Great, now I want a burrito...

Viajero Perpetuo

That is an incredible price for a newer (within past 12 years) controlled access dpto in Centro. With or without gastos comunes, with or without parking space? If this was a past year rental, I wonder if it is because of undisclosed EQ damage or danger? Old apartments in Centro can go for that but might come with pests or other issues.

Chile is still cheap if you go for home cooked meals and live outside of Santiago and resort areas but most visitors do not have that option.

Local feria (farmers type markets) produce, shopping butcher shops for meats, living on the coast and buying the day's catch at the local fish market are still cheap.

Chile has a major energy problem (reliance on hydrocarbons with hardly any domestic production) and this contributes to the price inflation as venders just pass the price on to the consumer.