August Consumer Price Movement
Argentina's National Institute of Statistics and Census (INDEC) released August Consumer Price Index (CPI) data on September 10, showing nationwide inflation at 1.9% month-over-month. This matched July's level, marking the fourth consecutive month below the 2% threshold with stable progress. Year-over-year inflation fell to 33.6%, recording its 16th consecutive month of deceleration.
Cumulative Inflation and Exchange Rate Impact
Cumulative inflation for January-August 2025 reached 19.5%, achieving the lowest level since the same period in 2020. Despite concerns that a 10% depreciation in the official exchange rate against the dollar over July-August would drive up CPI, price stability has persisted. By category, seasonal variable goods and services fell 0.8% (vs. 4.1% previous month), regulated prices including energy and public services rose 2.7% (vs. 2.3%), and core inflation increased 2.0% (vs. 1.5%).
Category-wise Trends and Consumption Decline
By expenditure category, clothing and footwear decreased 0.3% month-over-month, marking the second consecutive monthly decline. Local economists attribute this to consumption cooling and seasonal transition sales suppressing price increases. However, some categories exceeded the average increase, including restaurants and hotels (3.4%), alcoholic beverages and tobacco (3.5%), and transportation (3.6%).
September Outlook and Political Factors
Local economists forecast September CPI inflation at 2.0-2.4%, expecting acceleration compared to previous trends. Key factors include continued depreciation of the official exchange rate against the dollar, political uncertainty following the September 7 Buenos Aires provincial legislative election where the Justice Party (Peronist Party) outperformed President Milei's Liberty Advances (LLA), and anxiety ahead of the October 26 congressional midterm elections. However, with wage growth lagging and consumer appetite cooling, along with increased import competition, significant price increases remain unrealistic, suggesting September inflation will likely stay in the low 2% range.