Inflation in Argentina increased to 2.2% in October, as reported by the national statistics agency INDEC on Thursday. The figure indicates a second consecutive monthly increase, succeeding a reading of 1.9% in September. For the first time in three months, monthly inflation has surpassed the 2% threshold. The October reading was also the highest since April, when inflation reached 2.6%. However, there was some positive development for Javier Milei’s administration. Core inflation registered at 1.5%, a decline from the 1.7% observed in the preceding month. Core inflation has reached this low level only once during Milei’s administration, specifically in July 2025, which was 15 months ago. The most recent instance of core inflation being lower occurred in November 2017, at a rate of 1.3%.
Prices increased by 33.1% compared to the same period last year, and the total inflation rate for the initial ten months of 2026 stood at 26.3%. The notable difference between the headline inflation figure and the core inflation measure arises from the exclusion of products and services whose prices exhibit significant seasonal fluctuations, in addition to those whose prices are subject to government regulation. These were exactly the categories that experienced the most significant increases. Seasonal prices experienced an increase of 5.5%, primarily attributed to a significant rise in the prices of vegetables, tubers, and legumes. Meanwhile, regulated prices rose by 2.9%, driven by increased costs in the petrol and motor vehicle fuel sectors. According to analysts at brokerage firm Puente, “The modification of the Cold Zone Regime [a system of subsidized natural gas tariffs for certain colder regions of Argentina] may have had an impact on the regulated-price subindex.”
The analysts noted that this is also apparent in the category breakdown: the most significant monthly increase was observed in housing, water, electricity, gas, and other fuels (4.2%), with regional variations spanning from -2.2% to +11.1%. In his analysis of the inflation figures on X, Economy Minister Luis Caputo reached a similar conclusion: “This month’s figure was affected by changes to the Cold Zone Regime, which influenced the variation recorded in the housing, water, electricity, gas, and other fuels category,” he stated. The second-largest increase, meanwhile, was recorded in recreation and culture at 3.3%. Conversely, the two categories exhibiting the least significant price increases across the nation were alcoholic beverages and tobacco, which saw an increase of 0.8%, alongside education, which experienced a rise of 1.3%. Despite the decline in the core inflation figure, the result disappointed the market, as analysts had anticipated the headline inflation to be approximately 1.8%.
“We will have to see whether headline inflation converges with core inflation once these temporary factors have passed, although the impact of the Cold Zone Regime may also be felt in November,” Puente analysts argued. Meanwhile, Guido Zack told that “within this unfavorable context, the only encouraging sign is that core inflation has declined.” Although he noted that “one might think that part of this (upward) effect is likely to reverse in November,” he emphasized that both headline and core inflation “are showing greater volatility than usual.” Therefore, he does not consider the 1.5% figure to represent “a new ceiling for core inflation.” He concluded: “The reality remains the same: the government, and Argentina as a whole, are struggling to definitively push monthly inflation below the 2% threshold.”
