By Hernan Nessi
BUENOS AIRES (Reuters) – Argentina’s monthly inflation rate is expected to have fallen to 3.9% in August, a Reuters poll of economists showed on Monday, the lowest level since early 2022, although it is still just below the previous month’s 4%.
The rate would be a sign of progress for the government of libertarian President Javier Milei, which is focused on curbing skyrocketing prices. But the marginal extent of the slowdown shows that this is becoming increasingly difficult.
Analysts agree that the rise in consumer prices in the South American country last month was likely due to higher service and transportation costs, according to a survey of 24 local and foreign analysts.
“Regulated prices have pushed the inflation index higher again,” Fundacion Libertad y Progreso (LyP) said in a report, citing utility costs for electricity and gas, and public transport.
The poll found that forecasts for inflation last month ranged from a low of 3.4% to a high of 4.4%. This implies both a median estimate and an average rate of 3.9%.
Since the inauguration of right-wing economist Milei in December, inflation has steadily declined from 25.5% that month to 4.2% in May, 4.6% in June and 4.0% in July. However, some economists say the process appears to be stalling.
“The slowdown that has been taking place since the start of the year is starting to get more complicated,” consultancy EcoGo said. “With core inflation ‘stagnating’ around 4% since May, August does not seem to have been able to break that trend.”
However, September could also bring good news on the inflation front after the government announced late last month that it would cut import and freight taxes from 17.5% to 7.5%, economists note.
“We expect the tax cut in September to impact prices of imported goods and, to a lesser extent, services that use imported inputs,” said LyP Director Aldo Abram.
Argentina’s national statistics agency INDEC will publish inflation figures for August on Wednesday.
(Reporting by Hernan Nessi; Writing by Gabriel Araujo; Editing by Adam Jourdan, William Maclean)