Key Points
— Argentina’s central bank market survey (REM) raised the 2026 inflation forecast to 29.1% — up 3.1 percentage points from the previous month’s estimate — as the Iran conflict’s oil shock disrupts Milei’s disinflation narrative
— GDP growth was cut to 3.3%, down from the World Bank’s 3.6% projection, with analysts citing uneven activity across sectors despite the macro stabilization
— March inflation is expected at 3% monthly, and the peso is forecast to reach 1,700 per dollar by December — a 17.4% annual depreciation that signals continued currency pressure
The Argentina inflation forecast for 2026 took its sharpest upward revision in months, as analysts surveyed by the central bank recalibrated their models for an economy that had been the region’s disinflation success story — until the Middle East war rewrote the energy price outlook, Reuters reported Wednesday.
The Relevamiento de Expectativas de Mercado (REM), published monthly by the Banco Central de la República Argentina, showed the median forecast for full-year 2026 inflation rising to 29.1% — a 3.1 percentage point jump from the previous survey. The revision is significant because Argentina’s disinflation had been Milei’s most bankable achievement: annual inflation fell from 211% in 2023 to roughly 30% by late 2025, a trajectory that had attracted investor confidence and underpinned the peso’s relative stability.
What Changed
The Iran conflict is the primary culprit. Although Argentina is a net energy exporter through Vaca Muerta, the global oil price shock feeds through to domestic fuel costs, transport prices, and food logistics — the same transmission mechanism that is hitting Chile, Colombia, and Brazil simultaneously. Wise Capital, one of the survey participants, described the March REM as arriving in a scenario of “marked heterogeneity in economic activity” and said the geopolitical impact from the Middle East had fundamentally altered the inflation path.
March monthly inflation is projected at 3% — a level that, if sustained, would produce an annualized rate of over 42%, well above the 29.1% year-end forecast. Analysts appear to be betting that the ceasefire announced this week will bring oil prices down enough to ease the second-half trajectory. If the truce collapses and Brent returns above $100, the 29.1% number will look optimistic.
Growth Slowing Too
The GDP forecast of 3.3% is respectable by Latin American standards — the World Bank projects Argentina at 3.6%, making it one of the region’s faster-growing major economies. But the number represents a deceleration from the 4.5% rebound in 2025, and the “marked heterogeneity” Wise Capital flagged is real: while Vaca Muerta energy exports and mining are booming, domestic consumption remains suppressed by austerity. Poverty has fallen from 52.9% to 31.6% but still affects nearly one in three Argentines.
The Currency Signal
The peso forecast of 1,700 per dollar by December — implying 17.4% annual depreciation — suggests analysts expect the crawling peg to continue absorbing inflation differentials without a discrete devaluation. The current rate of approximately 1,382 pesos per dollar leaves room for gradual adjustment, but any shock to the ceasefire or global risk appetite could accelerate the timeline. Argentina’s passage of the glacier law reform this week was designed partly to attract the kind of dollar-generating mining investment that strengthens the external position — but those dollars are years away from arriving.
For Milei, the REM revision is a reminder that disinflation is not linear. Argentina took inflation from 211% to 30% through monetary discipline, fiscal austerity, and a devaluation shock — but the last mile from 30% to single digits requires external conditions that the Iran war has disrupted. The Adorni scandal and political noise may dominate headlines, but it is this number — 29.1%, not 26% — that will determine whether the economy delivers for voters before the next electoral test.