In June, Argentina experienced a 1.6% increase in consumer prices, reflecting a positive outcome for President Javier Milei’s economic programme. According to the official figures released on Monday by the national statistics agency INDEC, the annual inflation rate stands at 39.4%, with a notable increase of 15.1% in prices during the first half of the year. It signifies yet another occasion for the government, which had previously expressed approval of May’s data when inflation decreased to 1.5%. The monthly rate reached its lowest point since the beginning of the Covid-19 pandemic. In April, inflation was recorded at 2.8%.
INDEC reports that the most significant monthly increase was observed in the Education category, which rose by 3.7% as a result of elevated tuition fees. The subsequent increase in Housing, Water, Electricity, and Other Fuels, which rose by 3.4%, can be attributed to rising rent and associated building costs. Conversely, the indices for clothing and footwear experienced a modest increase of 0.5%, while food and non-alcoholic beverages saw a slightly higher rise of 0.6%.
In June, services experienced a notable increase of 3.2%, which is four times the growth observed in goods at 0.8%. This disparity highlights the ongoing financial strain faced by renters, utility consumers, and users of regulated services. The prices of regulated goods, including electricity and public transportation, experienced an uptick of 2.2%, whereas seasonal products saw a modest decrease of 0.2%.
Regional disparities were significant. In the Buenos Aires province, the area experienced the most significant monthly inflation rate at 2.0%, while Patagonia recorded a rate of 1.8%.
Since assuming office in December 2023, President Milei, who identifies as a libertarian anarcho-capitalist, has prioritized combating inflation as the centerpiece of his “chainsaw” economic reforms. These measures encompass substantial reductions in expenditure, the elimination of subsidies, and a significant devaluation of the currency. Loans from the International Monetary Fund and World Bank have, to date, contributed to a speculative increase in foreign investor confidence.
Although monthly inflation has shown signs of moderation in the past few months, the overall economic landscape continues to exhibit significant challenges. Argentina persists in facing elevated poverty rates, with labor unions contending that the repercussions of austerity measures are disproportionately affecting lower-income demographics.