In October, inflation in Argentina showed a monthly increase of 2.8%, approaching the rate of the official exchange rate. It is considered that the reduction of the PAIS tax may have influenced this convergence. Adjustments in public services reflected a more moderate policy. The category of miscellaneous goods and services had the highest increase, driven by personal care items, followed by health and education with an increase of 3.5%.
"Eugenio Marí, Chief Economist of the Libertad y Progreso Foundation, mentioned that inflation is decreasing faster than expected, with an annual slowdown of 192.9%, the sixth consecutive decrease. The economy has dropped 96.5 percentage points since its peak of 289.4% year-on-year in April," he highlighted.
The BCRA's REM forecasts show inflation for 2025 below 30% for the entire year, with IPCs that could start with a 1 in the second half of next year. Marí emphasized that "the exchange anchor is operating to reduce the nominality of the economy."
Regarding the year-on-year variation, it reached 192.9%, marking a significant decrease from the peak of 289.4% year-on-year in April. Marí pointed out that inflation has been reducing faster than expected, with services being a key component in this trend. The goods surveyed have moderated in the analyzed month.
The study by Libertad y Progreso revealed an IPC increase of 2.7% in October, showing a deceleration of 0.8 percentage points compared to September. This result consolidates inflation's decline, reaching its lowest monthly growth rate since November 2021, with a total increase of 107.0% in the first ten months of the year.
Private consultants indicate that October's inflation was the lowest in three years. A price survey in the GBA region showed a 2.8% increase in the cost of living, compared to 3.5% in September. The year-on-year variation decreased to 196.4%, the lowest level since November of the previous year. Core inflation was at 3.6%, showing a downward trend throughout the month and focusing on public goods and services.
Despite the appreciation of the exchange rate, it is emphasized that sustainable improvement will only be possible with an increase in the average productivity of the economy. Therefore, the need to advance in structural reforms such as deregulation, economic opening, strengthening of the education and health systems, and tax reductions is emphasized.
