Argentina’s inflation up to 276% in February but slows down from January

SAO PAULO (ICIS)–Argentina annual rate of inflation went up to 276.2% in February, up from 254.2% in January, the country’s statistical office Inegi said on Tuesday.

However, month on month the Price Consumer Index (IPC in its Spanish acronym) rose by 13.2% in February, considerably lower than the 20.6% rate prices increased in January, compared to December.

Prices for communications (up 24.7% in February, compared with January), transport (up 21.6%), or utilities (up 20.2%) rose well above the monthly average of 13.2%.

Those sectors are some facing the withdrawal of several subsidies as part of President Javier Milei’s shock therapy for the beleaguered economy, which was heavily dependent on state subsidies.

As predicted by most economists, the measures taken so far by President Javier Milei are causing an economic shock which is bringing activity down sharply as well as increasing prices rapidly, mostly because of the peso’s devaluation.

The Argentinian economy entered recession in 2023 and the downturn is expected to worsen in the first half of 2024 as Milei’s shock therapy kicks in.

Manufacturing output is falling sharply, and petrochemicals sources in the country have said to ICIS demand could fall in the first half by 30% in an optimistic scenario, and by as much as 60% in a pessimistic one.

The President’s office, however, was quick to issue a release on Tuesday arguing the slower price rises in February month on month showed the government’s measures were starting to show and were on the right direction.

The high annual rate of inflation, however, was blamed on the prior Administration.

“The President’s office reports that February inflation was 13.2%, evidencing a strong slowdown in prices compared to December 2023 (25.5%) and January 2024 (20.6%), a result of the government’s work to impose strong fiscal discipline,” said a statement from Casa Rosada, Milei’s official residence.

“The inflationary rise we face is a product of the uncontrolled bond emissions [by the central bank] of recent years and the squandering generated by the economic program of former [economy] minister Sergio Tomas Massa.”

Argentina inflation
Annual rate, in %

Source: Indec 

Argentina inflation
Monthly rate, in %

Source: Indec