Argentina’s inflation may be hitting pause. Economists aren’t ready to celebrate

After seven months of accelerating monthly inflation, prices may have finally taken a breather in April, according to private consulting firms. Their estimates put April’s price increase at 2.4% to 2.6% month-on-month the first monthly slowdown in 11 months. Official figures will be released by statistics institute INDEC on Thursday, May 14.  The number would bring some relief to President Javier Milei’s administration, whose main political asset and campaign promise bringing inflation down has been called into question by the recent price rebound. In May 2025, monthly inflation came in at 1.5%, the lowest reading since June 2020, in the thick of the COVID-19 pandemic. Prices have been climbing every month since. In March 2026,inflation hit 3.4% the highest level since March 2025. Food prices led the cooldown The Fundacin Libertad y Progreso, a free-market think tank aligned with the government, projects April inflation to hover around 2.4%. “Disinflation is back on track, propped up by the strength of the fiscal surplus, which remains the fundamental anchor of the process, alongside an exchange rate that has held steady since November,” said Toms Amerio, an economist at Fundacin Libertad y Progreso. According to the think tank, the slowdown was driven by a softening in food and non-alcoholic beverages, as well as clothing. C&T and Equilibra, two other firms that track the prices, reached the same conclusion, both pegging the price increase at 2.4%.  “Beef was decisive, rising only 2% the slowest pace since September of last year. Lower prices for fruits and vegetables added to the trend,” said Equilibra.  Utilities also helped cool the index, with smaller increases in gas and electricity keeping a lid on the housing category. C&T flagged the strong impact of education-related prices on the March reading due to the start of the school year, an effect that didn’t repeat in April.  “For the INDEC, that category was up 12% in March, while for April we estimate a rise closer to 5%,” the consultancy said. Other firms came in slightly higher. The think tank Orlando Ferreres & Asociados projected April inflation at 2.6%, the same figure as LCG and Econviews. “On one hand, we’re seeing a significant slowdown in food. Our price tracking shows a 1% increase for that category. That’s a big help,” Alejandro Giacoia, an economist at Econviews, told the Herald. “On the negative side, regulated prices are still running high. There’s some carryover from the gasoline hike that’s going to feed into the April data,” he added. C&T estimated that gasoline rose 4%, “reflecting the rise in international oil prices.” The consultancy agreed that “much of the increase came from a carryover effect from March, since prices began to stabilize from the second week of April.” The road ahead “Over the coming months, we’ll likely keep seeing monthly inflation closer to 2%, and by the second quarter even below that,” said Ivn Cachanosky, chief economist at Fundacin Libertad y Progreso. “With election noise out of the way, the money supply frozen and demand for pesos normalizing, the fundamentals are there to expect inflation to keep coming down,” he argued.  “Of course, we’ll have to keep an eye on the war in the Middle East and whether the conflict spreads.” Giacoia echoed that view, saying “the months ahead are likely to be calmer” and that “we can expect inflation lower than in April.” Melisa Sala, chief economist at LCG, told the Herald that inflation inertia is the main reason the government has struggled to bring inflation down sustainably. Sala added that the Argentine economy is now in a scenario “in which the exchange rate anchor is being used again, trade openness is disciplining prices, and sluggish activity is keeping a lid on wage-price pressures.” “The fact that inflation expectations haven’t been broken is what’s keeping core inflation the inertia comfortably above 2% a month,” she explained. “On top of that, some months you get hit by fuel adjustments tied to the war in the Middle East, by beef, or by utility-rate hikes meant to finish phasing out subsidies,” she added. Martn Rapetti, executive director at Equilibra, said that while the April number “is a significant drop from March,” it’s important “not to confuse a moment with a trend.” “Underlying inflation the trend rate remains stable in the 2.0%-2.5% monthly range. Bringing it down to international standards will take time and patience. Trying to rush the process can only lead to less activity and an overvalued exchange rate. Obviously, with all the risks that entails,” he said. According to the latest Market Expectations Survey (REM) by the Central Bank, the top 10 forecasters projected April CPI at 2.7%, gradually falling to 2% by October 2026. Meanwhile, the Universidad Torcuato Di Tella (UTDT) inflation expectations survey for April found that nationwide expected inflation over the next 30 days averaged 3.93% and was 3% at the median. Photo credit: Mariano Fuchila