In 2025, Argentina experienced a price increase of 31.5%, marking the lowest inflation rate since 2017, as reported. While the rate remains elevated compared to global benchmarks, inflation has shown signs of deceleration under Javier Milei’s administration. The figure stands at more than 86 points below the 117.8% projected for 2024, marking the initial complete year of his administration, and is 180 points lower than the 211.4% recorded in 2023, the final year of Peronist Alberto Fernández’s tenure. In December, the monthly inflation rate stood at 2.8%. The sector that experienced the most significant growth was transportation, which surged by 4%. Milei secured victory in the presidential runoff in November 2023, pledging to eliminate inflation. In that month, there was a notable increase in prices, recorded at 8.3%. The inflation statistics of Argentina from 2006 to 2015 lack reliability due to governmental interference in the measurement processes.
Critics argue that Milei’s approach to controlling inflation involves maintaining an artificially strong peso and implementing salary freezes, resulting in a significant decline in purchasing power. The situation has led to significant downturns across various sectors. Milei has asserted that inflation has decreased during his presidency primarily as a result of state reductions implemented under his “chainsaw” campaign. “The stabilization program based on fiscal surplus, strict control of the money supply, and capitalization of the Central Bank of Argentina will continue to be the pillars for continuing the disinflation process,” Economy Minister Luis “Toto” Caputo stated on X. “This represents the sole feasible approach to conclusively eliminating inflation and restoring Argentina’s greatness,” he remarked, reflecting U.S. President Donald Trump’s slogan.
Nevertheless, analysts indicate that the government will encounter multiple challenges in the future. As of December, the data indicates that monthly inflation has either stabilized or increased over the last eight months. Over the past year, inflation has remained stable at just above 31% since October. Balanz, a prominent Argentine broker, stated that while December’s monthly figure was “above market expectations,” they “anticipate monthly inflation to return to a downward trend during the first quarter of 2026, as the effects of rising meat and transport prices diminish.” Nonetheless, there was a divergence of opinions. Last month, the Central Bank announced it would adjust the currency bands (the upper and lower thresholds within which the peso can float without the monetary authority’s intervention) in accordance with the inflation rate, rather than increasing them by 1% each month.
The government’s economic team had crafted a plan predicated on the assumption that inflation would stabilize at approximately 1%. However, this scenario is currently not feasible, as noted by Florencia Fiorentin. She stated that the new, inflation-indexed scheme represents a “admission” that inflation is expected to rise in the forthcoming months. In the absence of the exchange rate serving as a stabilizing factor against inflation, the government is likely to rely on “salaries, fiscal adjustment, and consequently, a decline in mass consumption” as measures to combat inflation, Fiorentin stated. Furthermore, beginning in February, coinciding with the release of January’s figures, the INDEC will implement a revised basket of goods for the calculation of inflation. The index will place increased emphasis on services and transportation. The Center of Argentine Political Economy has determined that, had this methodology been applied since Milei assumed office, inflation would have risen by an additional 11% overall since December 2023. Given that the agency will implement the new calculation starting next month, that supplementary increase will effectively be overlooked.