In August, inflation in Argentina fell to 1.7%, according to the report released on Thursday by the National Institute of Statistics and Censuses. This figure indicates a deceleration from the 2.1% noted in July. It marks the second occurrence in 2026 where the inflation rate has fallen beneath the 2% threshold. It signifies the lowest monthly figure since the 1.6% recorded in June 2025. It is also the third-lowest rate recorded during the Milei administration. Core inflation held steady at 1.8%, mirroring the previous month, as upward pressures were noted in housing rentals and cultural services. The headline inflation figure was lower than the core rate, attributed to a 0.9% decline in seasonal goods and services in August.
Prices have risen by 33.5% relative to the previous year, while cumulative inflation has been documented at 21.3% for the year 2026 thus far. The division demonstrating the most pronounced growth during the month was housing, water, electricity, gas, and other fuels, reflecting an increase of 2.8%. In a notable development, the education sector experienced an increase of 2.5%. At the opposite end of the spectrum, the two divisions demonstrating the least variation nationwide were recreation and culture (0.0%) and clothing and footwear (-0.6%). The government celebrated the news. “VAAAAAAAAMOOOOOO TOTO…!!!,” President Javier Milei posted, referring to Economy Minister Luis “Toto” Caputo. While the figure represents a favourable development for the economic team, it is crucial to note that it fell considerably short of the initial projection set by Milei at the start of the year.
At that moment, the libertarian president had predicted that the inflation figure for August would begin with “0,…”. Disaggregated into goods and services, the latter experienced the most significant growth, increasing by 2%, whereas goods saw a rise of 1.4%. The expansion of services has continuously surpassed that of products since Javier Milei took office. The last instance of this situation not occurring was in January 2024, during the second month of the current administration. In addition to a decline in local consumption and an increase in imports from Asia, particularly China, this phenomenon can be linked to the deregulation of public utilities and healthcare services.
The INDEC-measured clothes and footwear segment, which had a 0.6% decrease throughout the month, is the best illustration of this. Following a 1.3% reduction in July, this was the second straight decline and the seventh in the previous 20 months. Economy Minister Caputo highlighted this figure on social media. The figure was consistent with the forecast in the latest Market Expectations Survey carried out monthly by the Central Bank among consulting firms and financial institutions. According to the same survey, inflation would rise slightly to 1.8% in September before progressively falling to 1.6% by February 2027.
