Monthly inflation report from Argentina's National Institute of Statistics and Censuses (INDEC)

Argentina's Inflation Halves to 117.8% in 2024 as Milei Delivers on Promise

Jan 14, 2025, 07:01 PM

Argentina's National Institute of Statistics and Censuses (INDEC) reported that consumer prices increased by 2.7% in December 2024 compared to November, leading to an annual inflation rate of 117.8% for the year. This represents a substantial decline from the 211.4% inflation rate recorded in 2023 and significantly lower than the 25.5% monthly inflation observed in December 2023. The December 2024 figure slightly exceeded November's 2.4% increase, with core inflation accelerating to 3.2% due to rising beef prices and services inflation remaining above 4% monthly. The reduction in inflation fulfills a major campaign promise by President Javier Milei, who had pledged to lower inflation significantly. Milei had previously indicated that if December inflation fell to 2.5%, he would consider reducing the crawling peg exchange rate mechanism from 2% to 1%. Markets are also anticipating a potential interest rate cut by the Central Bank of Argentina (BCRA), with expectations of a 400 to 500 basis point reduction. In December 2023, market expectations had forecast 2024 inflation to reach 213%, making the actual outcome a notable improvement. Despite the progress, some analysts express concern over the rising core inflation and services prices, suggesting that monetary authorities may exercise caution before implementing policy changes. The monthly inflation remains near a four-year low, providing the government with an opportunity to address persistent economic challenges.