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ECONOMY | 12-11-2024 16:59

Inflation in Argentina slowed to 2.7% in October – lowest level in almost three years

Consumer prices have increased by 107% in the first 10 months of the year and by 193% over the last year, reveals INDEC bureau.

Inflation in Argentina slowed to 2.7 percent last month – the lowest monthly rate since November 2021.

The figure, the lowest of the Javier Milei Presidency to date, means that consumer prices have increased 107 percent in the first 10 months of the year and by 193 percent over the last 12 months, according to official data.

Inflation decelerated from September’s 3.5 percent, reported the INDEC national statistics bureau.

Last month’s figure is a third of the inflation recorded in October 2023 (8.3 percent), and the lowest for the month since 2017.

The news underlines the progress made by President Milei’s administration in the battle against inflation. 

However, critics say the deceleration has come at the cost of consumption. Argentina is in a deep recession, with GDP expected to contract 3.5 percent this year. Poverty affects more than half the population, according to government data.

Looking ahead to November, most private consultancy firms predict a rate of between 2.8 percent and 3.2 percent, though government officials are hoping for a further deceleration. 

According to the latest Relevamiento de Expectativa de Mercado (REM) survey, published monthly by Argentina’s Central Bank, a slight rebound is expected in December (3.2 percent), followed by a staggered decline: three percent in January, 2.8 percent in February, and 2.8 percent in March.

“The gap [between the official dollar and the parallel dollar] is at a historic low from the last five years; the economy is recovering. There has never been a better moment than this,” declared Economy Minister Luis Caputo in a speech on Tuesday.


October hikes

October’s price hikes were led by a 5.4 percent surge in housing, water, electricity, gas and other fuels, mainly due to increases in rent and related expenses. 

It was followed by clothing and footwear (4.4 percent) and restaurants and hotels (4.3 percent), which peaked in Greater Buenos Aires and the northwest of the country.

Healthcare, education, alcoholic drinks and tobacco all increased by more than three percent over the month.

At the other end of the scale, bucking the normal trend, was transport and food and non-alcoholic beverages (both 1.2 percent).

Breaking down the measurements, core inflation stood at 2.9 percent, regulated prices at 2.7 percent and seasonal prices increased 1.4 percent over the same period. 

In a statement, Argentina's Economy Minister revelled in the news, highlighting that “core inflation was the lowest since September 2020, while overall inflation was the lowest since November 2021.”

“To analyse the dynamics of the disinflation process and extract trends beyond short-term volatility, it is useful to analyse the behaviour of the moving averages of CPI changes. 

“As has been the case since March, this analysis is consistent with a deepening of the disinflation process. 

“The three-month moving average was 3.4 percent per month, the lowest since January 2022, while the six-month moving average was 3.9 percent per month, the lowest pace since February 2022,” noted the Economy Ministry in its statement.

 

– TIMES/PERFIL/NA

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