Argentina’s August Inflation Hits 4.2%, Higher Than Expected

The National Institute of Statistics and Census (INDEC) reported that Argentina’s inflation for August reached 4.2%, with an annual rate of 236.7%, surpassing the government’s forecast, which had aimed to break below the 4% threshold.

The sector with the largest monthly increase in August 2024 was Housing, Water, Electricity, and Other Fuels, which rose by 7.0%, followed closely by Education, with a 6.6% rise. Meanwhile, Food and Non-Alcoholic Beverages contributed the most to the overall monthly inflation across all regions of the country, except in Greater Buenos Aires (GBA), where Transport led the increase.

Private consulting firms had predicted that the index would remain close to July’s 4%, with estimates ranging between 3.8% and 4.2%. Despite the unexpected rise, this marks the fourth consecutive month where inflation has hovered around the 4% mark. The primary driver of last month’s inflation was the sharp increase in regulated prices, particularly in transportation.

Argentina’s Minister of Economy, Luis Caputo, had recently forecast that August’s inflation would be “close to July’s level” (4%). Despite this persistent inflation rate, the government remains optimistic that September’s figures will finally dip below the 4% mark.

One key highlight is that core inflation also accelerated, reaching 4.1%. Over recent months, instead of declining, core inflation hit a low of 3.7% in May and June, then rose to 3.8%, eventually settling at its current level. Rounding out the categories, regulated prices increased by 5.9% due to hikes in public service tariffs, while seasonal items rose by 1.5%.