According to a report released on Thursday by the government’s statistics agency, INDEC, Argentina’s inflation rate for February stood at 2.9%. The figure remained unchanged from January, indicating that February represented the ninth consecutive month in which the inflation rate failed to decline. Prices rose by 33.1% on an annual basis, with the most significant monthly increase occurring in the housing, water, electricity, gas, and other fuels sector, which experienced a 6.8% rise. The increase was primarily attributed to the escalation in gas, water, and electricity rates across most provinces, alongside adjustments to the schemes for beneficiaries of both subsidized and non-subsidized rates. Subsequently, food and non-alcoholic beverages, along with miscellaneous goods and services, experienced an increase of 3.3% each.
During the initial two months of the year, the cumulative inflation rate reached 5.9%. The government’s 2026 budget projected a 10.1% rise in prices for the full year. Inflation and its measurement are pressing issues in Argentina. Last month, the INDEC announced its intention to revise the methodology employed for calculating inflation. The existing measure relies on a collection of goods and services derived from a national survey conducted in 2004, with the bureau intending to substitute it with findings from a 2017-2018 study. The primary distinction lies in the fact that the revised approach would have allocated greater significance to the expense of utility fees, which, in February, experienced the most substantial rise. Economy Minister Luis Caputo stated that he and President Javier Milei did not concur with the modification, asserting that the new index would only be implemented “once the disinflation process is fully consolidated.” Marco Lavagna has stepped down due to a disagreement.
Caputo elucidated February’s figure in a post, stating that “the Argentine economy is still undergoing a process of relative price corrections, after more than two decades of accumulating distortions that led to stagnation in economic activity and employment and a growing inflationary trend.” He emphasized that the correction “is essential to ensure macroeconomic order and the conditions for the economy to remain on a path of sustained growth.” Sebastián Menescaldi noted that inflation has consistently hovered around 3% for the third consecutive time, with March’s inflation likely to reflect similar trends due to significant seasonality in clothing and education, alongside influences from regulated prices. “This situation will therefore hinder the government’s strategy to deflate the economy and achieve 0% inflation in August,” as President Javier Milei announced. He noted that firms operating in “segments where demand is not as robust will seek to increase their prices to regain some of their profitability, given that other prices have risen by over 12% cumulatively.”
Menescaldi stated “While official activity data for this period is still pending, it is important to note that January and February typically exhibit significant volatility due to holiday-related factors, including plant shutdowns and other atypical conditions. Nonetheless, we can assert that stagflation is present.” The liberalization of meat exports, the rise in bus fares, and a new system of targeted subsidies “will involve significant changes in prices from month to month,” as noted by the economist.