Argentina’s price index slowed down in July to 1.6% monthly, the lowest figure in 14 months. Javier Milei celebrated it on social media with an enthusiastic congratulatory message to his Minister of Economy, Luis Toto Caputo: “VAAAAAAAAMOOOOOO TOTO…!!!”. The goal shout is understandable in a country that in 2023 reached 211% inflation and has since reduced it to 33.5% year-on-year, but it is still far from approaching that of neighboring countries: prices increased in the last year by 1.5% in Paraguay, 4.1% in Chile, 4.4% in Brazil, 4.5% in Uruguay, and 5% in Bolivia.
Despite the improvement in the indicator, it fell short of Milei’s promise to reach August with an inflation rate starting with the number zero. It has also not been possible to meet the annual inflation projected in the 2026 Budget, of 10.1%. In just the first eight months of the year, prices doubled that estimate, with an increase of 21.3%.
According to data from the National Institute of Statistics and Censuses (Indec), the category with the highest increase was Housing, water, electricity, gas, and other fuels, with a rise of 2.8%, followed by Education (2.5%) and Health (2.4%). On the contrary, clothing and footwear prices fell by 0.6% due to the impact of the import opening decreed by Milei’s government, and there was no increase recorded in Culture.
The slowdown in inflation helps the economic team reinforce the diagnosis that the worst is behind and that the country is heading towards rapid growth. The president repeats this message almost daily, which will be central in the campaign in which he will seek re-election in the 2027 presidential elections.
At the same time, Milei lashes out at those economists and opponents who point out the weak points of his model. One of them, as another official indicator showed this week, has to do with the sharp decline in two key sectors for employment: industry and construction. Another is the loss of purchasing power of wages, which has led thousands of families to go into debt and be unable to repay loans.