Argentina monthly inflation dips below 2% for first time since 2025

Argentina's monthly inflation rate dropped to 1.9% in June, marking the first time the figure has fallen below the 2% threshold since August 2025. The data, published on Tuesday by the national statistics bureau INDEC, matched market forecasts of 1.5% to 2% and extended a disinflation trend that began in April following a March peak of 3.4%.

The headline number was supported by a moderation in core inflation, which excludes seasonal factors and regulated prices, falling to 1.6%. This represents the lowest core reading since July 2025.

“The breakdown of the data points to a very positive outlook,” said Santiago Casas, chief economist at EcoAnalytics. “Goods rose by just 1.4 percent month-on-month and, within this category, food and non-alcoholic beverages recorded an increase of only 1.3 percent, confirming that disinflation is spreading to mass-market consumer goods,” he noted.

However, regulated and seasonal categories offset some of these underlying gains. Housing, utilities and fuel prices drove the overall index up by 3.5%, while recreation and culture costs surged 4.2%. Cost-of-living indicators continued to climb, with the Total Basic Basket, used to calculate the poverty line, rising 2.2%.

While the monthly pace is cooling, the cumulative toll remains stark for the broader economy. Prices have accumulated a 16.8% increase so far this year, leaving annual inflation stubbornly high at 33.5%. Economy Minister Luis ‘Toto’ Caputo highlighted the milestone on social media, stating the data reflected "the strength of the disinflation process" under President Javier Milei.

The statistical victory stems from a rigorous austerity programme implemented since December 2023, which eliminated the country's chronic fiscal deficit and brought inflation down from triple digits. Yet this macroeconomic stabilization has suppressed domestic demand. The economy grew a modest 0.7% in the first quarter, driven entirely by primary exports and financial intermediation, while industry and commerce continued to contract.

Market professionals caution against pricing in a definitive end to price instability. "Beyond June's specific figure, what matters will be watching the inflation trend in the coming months," said Javier Bongiovanni, an economist at the Fundación Libertad think tank. "What will really matter is whether inflation can sustain that level [below two percent] over time."