Inflation in Argentina Hits 3.5% in September, Lowest Since 2021
Argentina's inflation rate has significantly dropped to 3.5% in September 2024, marking the lowest monthly increase since November 2021. This decrease comes as a relief for the government led by President Javier Milei, following a slight uptick to 4.2% in August. The latest figures, reported by the National Institute of Statistics and Census (INDEC), indicate a year-on-year inflation rate of a staggering 209%.
The 3.5% inflation rate breaks a plateau that had persisted since May, offering a glimmer of hope in a country grappling with one of the highest inflation rates globally. This decline is particularly notable considering that Milei's administration began with a shocking 25.5% monthly inflation rate in December 2023. The recent CPI figures suggest a potential stabilization in prices, although experts caution that maintaining this trend will be challenging as the economy emerges from recession.
The primary contributors to the inflation decrease in September were lower increases in food prices, which rose by just 2.3%, compared to steeper hikes in housing, utilities, and fuel, which surged by 7.3%. This shift is crucial as food costs heavily influence the overall inflation index in Argentina.
In addition to the CPI, INDEC reported on the Total Basic Basket (CBT), which increased by 2.6% in August, costing approximately 964,620 pesos (about $965) for a family of four. The Basic Food Basket (CBA), which includes essential food items, rose by 1.7% and now costs around 428,720 pesos. These figures highlight the ongoing poverty crisis in Argentina, with 53% of the population living below the poverty line as of mid-2024.
Despite these improvements, the government faces significant hurdles ahead. The IMF predicts a 3.5% contraction in GDP for 2024, and experts warn that lifting exchange restrictions could lead to renewed inflationary pressures. As the government navigates these complexities, the recent drop in inflation offers a momentary respite in a turbulent economic landscape.
