Argentina’s Monthly Inflation Rate

By Hernan Nessi

BUENOS AIRES (Reuters) – Argentina’s monthly inflation rate is expected to have edged down to 3.9% in August, according to a Reuters poll of economists. This marks the lowest inflation rate since the start of 2022, slightly below the 4% recorded the previous month.

This decrease is seen as a sign of progress for President Javier Milei, who has prioritized controlling escalating prices, although the minor reduction indicates the increasing difficulty of this task.

Analysts suggest that rising consumer prices last month were mainly driven by increased service and transportation costs. A report from Fundacion Libertad y Progreso (LyP) noted that regulated prices, such as utilities for electricity and gas and public transport costs, contributed to the inflation increase.

The inflation projections for August ranged from 3.4% to 4.4%, resulting in a median and mean average estimate of 3.9%. Since Milei’s inauguration in December, inflation has consistently slowed from 25.5% to 4.2% in May, 4.6% in June, and 4.0% in July. However, some economists believe the slowdown process may be stagnating.

EcoGo consultancy indicated that the decline observed since the year began is becoming more challenging. With core inflation around 4% since May, August has not managed to deviate from this trend.

Looking ahead, September may bring more positive news, as the government announced a reduction in the import and freight cargo tax from 17.5% to 7.5% last month. Economists anticipate that this tax cut will affect the prices of imported goods and, to a lesser extent, services dependent on imported inputs.

Argentina’s national INDEC statistics agency will release the August inflation data on Wednesday.