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ECONOMY | 12-04-2024 16:35

Argentina monthly inflation slowed more than expected in March

Monthly inflation in Argentina slowed more than expected in March, cooling for the third straight month.

Inflation in Argentina slowed more than expected in March, cooling for the third straight month as President Javier Milei’s austerity hurts consumer spending.

Consumer prices rose 11 percent from February to March, less than economists expectations for 12.1 percent, according to government data published Friday. From a year ago, inflation accelerated to 287.9 percent, the highest level since Argentina exited hyperinflation in the early 1990s. 

Inflation data comes a day after Argentina’s central bank cut its benchmark rate to 70 percent, citing monthly price increases slowing even as the annual rate remains well above borrowing costs. 

Four months into office, Milei has lifted price controls, devalued the peso and slashed government spending on social security and public sector workers’ paycheques when adjusted for inflation. That recipe has translated into sales tanking at shopping centres, limiting the degree to which businesses can continue raising prices going forward. Inflation expectations have also cooled as Milei hasn’t wavered on his austerity drive.

Economists surveyed by Argentina’s Central Bank see monthly inflation cooling below 10 percent in May, an earlier-than-expected timeframe. Annual inflation is projected to end this year at 189 percent. 

by Patrick Gillespie, Bloomberg

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