Inflation up for fifth month running amid controversy over methodology

January inflation came in at 2.9 percent, rising for the fifth consecutive month, Argentina’s INDEC national statistics bureau confirmed Tuesday.

The figure was released just over a week after INDEC’s head resigned, reportedly in opposition to the government’s decision to postpone the implementation of a new measurement methodology.

The January reading marked a slight increase on December’s 2.8 percent and took further distance from last August’s 1.9 percent. The steepest rises were recorded in food and non-alcoholic beverages, and in restaurants and hotels.

“This consolidates an accelerating trend that began in August. It’s not a good number,” said economist Elisabet Bacigalupo of the ABECEB consultancy firm.

“For the past two months, the annual figure has also been accelerating,” she added.

The credibility of INDEC’s Consumer Price Index (CPI) – the reduction of which is President Javier Milei’s government’s main trump card – has come under scrutiny.

The indicator is based on a basket of goods and services compiled more than 20 years ago, which critics argue no longer reflects current consumption patterns.

INDEC, with assistance from the International Monetary Fund (IMF), had been working on updating the index. The revised methodology was due to be introduced in mid-2025 but had already been postponed until January.

Its rollout, however, was shelved last week on the same day that INDEC chief Marco Lavagna – who had expected the January index to be published using the new methodology – resigned.

Economy Minister Luis Caputo confirmed Lavagna’s departure and said the current methodology would remain in place for now.

President Milei and his team believed that any methodological change should come once the taming of inflation had been “fully consolidated,” Caputo argued.

Lavagna’s abrupt exit and the government’s subsequent explanation could affect confidence in Argentina’s official statistics. 

However, Bacigalupo argued that “if the government had changed the methodology, inflation would not have been higher – in fact, we believe it would have been slightly lower.”

The revised index gives greater weight to services and utilities, whose prices have risen sharply since Milei took office in December 2023.

Milei reduced annual inflation from 211.4 percent in December 2023 – after halving the value of the peso – to 31.5 percent in 2025, its lowest level in eight years.

– TIMES/AFP