Argentina’s inflation edged up last month on winter holidays

Argentina's consumer prices rose 2.1 percent in July compared to June, slightly above economists' two-percent median estimate. This marked a rebound after three months of slower inflation readings, impacting President Javier Milei's economic agenda. Inflation had been below two percent for the first time in 10 months in June before this increase.

Looking at a year ago, inflation had risen marginally to 33.8 percent from 33.5 percent, exceeding expectations. Data from the INDEC statistics agency revealed that inflation in Buenos Aires City exceeded expectations at 2.9 percent, driven by people's winter vacations in the Southern Hemisphere. This, along with increased airplane ticket prices due to the World Cup, influenced national inflation expectations.

Culture and recreation saw the largest increase within the national consumer price index, with a five percent hike, while restaurants and hotels rose 2.8 percent. Core inflation stood at 1.8 percent. Ahead of the inflation report, Economy Minister Luis Caputo revealed a new measure to encourage economic activity. Companies without earnings in dollars can now borrow greenbacks, aiming to utilize idle dollars at record levels.

This step is designed to spur economic growth, particularly in sectors heavily reliant on employment. Caputo acknowledged July as a seasonally high month for inflation, expecting it to converge with international levels soon. The central bank's economists surveyed in July projected a 2026 year-end inflation rate of 29.8 percent, down from 30 percent in a previous survey, coupled with a growth rate of 2.7 percent, down from the June forecast of 3 percent.