By Miguel Lo Bianco and Noelle Harff
BUENOS AIRES (Reuters) – Argentines say they have yet to see the benefits of falling inflation, with analysts predicting the five-month period could be over when official figures for June are released on Friday.
Since President Javier Milei came to power late last year, inflation in Argentina has fallen dramatically, from 25.5% in December to 4.2% in May.
The sharp decline has been attributed to a series of cost-cutting and austerity measures that have curbed consumer demand, as well as measures to curb the printing press.
Inflation is expected to change in June, with a median estimate of 5.1%, according to a Reuters poll. However, on Thursday, Milei’s Economy Minister Luis Caputo said he expects inflation to fall below 5% in June.
For many Argentines, the economic slowdown is not enough to ease the pain of high prices for utilities, transportation and food. The minimum wage of 234,315 pesos ($260) a month is still lower than the annual inflation rate of almost 300%.
“I don’t think (inflation) goes hand in hand with salary increases and taxes,” said Gustavo Garcia, a 47-year-old hairdresser who was hunting for bargains at the central market in Buenos Aires.
“Daily inflation is much higher than 4% or 5%,” said Garcia, who is skeptical of the calculation of the official figures.
Milei, a free-market economist, ended the previous Peronist government’s price freeze on many public services and says tough fiscal medicine is needed to revive the economy. The minimum bus fare in Buenos Aires has risen more than 400% since Milei took office.
At the market, Isidoro Recalde, 67, said the rate increases were necessary and he supported the government’s plan.
“What we paid before was insignificant,” Recalde said. “Let’s be realistic. Day to day things are complicated, but we have to move forward.”
The Argentine government is touting its success in curbing inflation, which has risen above 30%, and improving state finances as a result of Milei’s austerity measures.
“Lowering inflation means protecting those who have the least,” the economy minister told reporters earlier this week. “(Inflation) is the heaviest burden on the poor,” Caputo said.
But inflation is still among the highest in the world, while a recession continues to hit consumers hard and poverty is almost 60%. People are being squeezed hard, with huge job losses in sectors such as construction.
“Every day there are new prices, it’s not like (inflation) stops,” said Emilia, a 65-year-old resident who was also shopping and who didn’t want to give her last name. “It’s a lie that prices are going down,” she said.
Argentina’s national statistics agency INDEC, generally trusted by analysts after a major overhaul in 2016, is expected to release its inflation figures at 1900 GMT on Friday.
(Reporting by Miguel Lo Bianco, Claudia Martini and Noelle Harff. Editing by Lucinda Elliott and Rosalba O’Brien)
