Argentina’s Inflation Hits Lowest Level in Two Years: 4.2% in May

The data marks five consecutive months of decline and boosts the administration of President Javier Milei, who won one of the most significant battles in the Senate this Wednesday: the approval of the so-called “Ley Bases.”

Another piece of good news for Argentina, especially for President Javier Milei. Inflation rose by 4.2% in May compared to the previous month, marking five consecutive periods of decline.

The figure came in below the market’s expected 5%, recording a 71.9% increase year-to-date and a 276.4% year-on-year increase, according to the National Institute of Statistics and Censuses (Indec). This performance gives a significant boost to the President’s administration, which secured a major victory in the Senate this Wednesday with the approval of the “Ley Bases,” the backbone of his government program that includes stringent economic adjustments.

“The price dynamics fell below the consensus expectations of analysts participating in the BCRA’s Market Expectations Survey (REM). In the April and May surveys, the median expected inflation for the past month was 7.5% and 5.2%, respectively,” celebrated Luís Caputo, the Minister of Economy, on social media.

This occasion marks the first time the inflation rate has fallen below the previous month’s figure, consolidating the downward trend from the peak of 25.5% reached in December.

The sectors that saw the most significant increases, according to the survey, were communication (8.2%), almost double the general index; education (7.6%); and alcoholic beverages and tobacco. Meanwhile, health saw a modest increase of only 0.7% after fluctuations in prepaid plan fees.

One of the key metrics watched by the market and the Executive Branch is core inflation, which again came in below the general indicator at 3.7%. Seasonal items increased by 7.2%, and regulated prices rose by 4%.