Argentina records lowest monthly inflation in 4.5 years

A man walks past Argentina’s Ministry of Economy in Buenos Aires on February 13, 2025. Inflation in Argentina was 2.2% in January, the lowest monthly figure since July 2020, and fell to 84.5% year-on-year, the National Institute of Statistics (Indec) reported on Thursday. (Photo by LUIS ROBAYO / AFP)

Buenos Aires, Argentina — Argentina recorded a monthly inflation rate of 2.2 percent in January, the lowest in 4.5 years, the INDEC national statistics agency said Thursday, in a boost for budget-slashing President Javier Milei.

Inflation, the perennial bugbear of South America’s second-biggest economy, was down from 2.7 percent in December, it said, and January was the fourth straight month in which prices rose by less than 3 percent.

Year-on-year, January inflation came in at 84.5 percent, said the INDEC — the first time in two years it was under 100 percent, but still one of the highest in the world.

By the end of 2024 inflation was at 117.8 percent and a year earlier at 211.4 percent.

READ: Argentina’s annual inflation soars to 211.4%, highest in 32 years

Self-declared “anarcho-capitalist” Milei came to power wielding a chainsaw as a symbol of his plan to restore fiscal discipline and curb runaway prices.

During his first month in office in December 2023, inflation hit a record 25.5 percent after he devalued the beleaguered peso by 52 percent.

But by November 2024, it had fallen to its lowest level in over four years on the back of an austerity program that has entailed firing over 33,000 public sector workers, halving the number of government ministries and vetoing inflation-aligned pension increases.

Milei’s measures, which plunged Argentina into recession, are blamed for tipping millions more people into poverty in the first half of 2024 and brought tens of thousands of people into the streets in protest.

Milei has swatted away criticism, insisting that what he presents as short-term pain will lead to long-term gains for the economy.

“The disinflation process continues,” Economy Minister Luis Caputo celebrated on social network X as he hailed a “process of stabilization and disinflation” on Milei’s watch.

Last year, Argentina recorded its first budget surplus in a decade.

But the collateral damage from his austerity measures has been a loss of purchasing power, jobs, and spending.

The government has forecast an economic rebound in 2025, with GDP growth of 5.0 percent.