Argentina’s April Prices Rise 2.8%, Slowest Since 2021, Annual Rate Hits 47.3%

Argentina’s monthly inflation fell to 2.8% in April, undershooting analyst forecasts of 3.1% and extending President Javier Milei’s streak of price stabilization gains.

Official data reveals annual inflation dropped to 47.3%, its lowest since May 2021, though persistent cost-of-living pressures weigh on households.

The decline stems from Milei’s decisive reforms: slashing public spending by 18-25% in real terms, abolishing currency controls, and introducing a floating exchange band (1,000–1,400 pesos/USD).

Sectoral disparities persist. Restaurant and hotel prices surged 4.1%, while home maintenance costs rose just 1.2%.

Food inflation outpaced the national average at 2.9%, with beef prices jumping 6.2% monthly. Rent and utilities increased 1.9%, cushioned by partial tariff freezes.

Central Bank Vice President Vladimir Werning predicts further easing to 2% by July, aligning with market expectations of 31.8% annual inflation by December.

Argentina’s April Prices Rise 2.8%, Slowest Since 2021, Annual Rate Hits 47.3%

The austerity drive carries steep social costs. Public sector wages fell 18-25% after inflation adjustments, and pension cuts triggered 14 nationwide strikes in 2025.

Poverty rates hover near 46%, per INDEC, as median wages buy 23% fewer goods than in late 2023.

Milei’s mid-April currency liberalization sparked a 12% peso devaluation, narrowing the gap between official and parallel exchange rates to 1,320 pesos/USD.

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Investors reward progress. Emerging market bonds rallied on April’s data, with yields tightening 150 basis points.

The IMF cautiously endorsed Milei’s fiscal discipline but warned of “overshooting” risks after a $20 billion loan agreement.

Structural challenges remain: central bank reserves sit at $9 billion, below IMF targets, while soybean exporters withhold $8 billion in revenue.

Since 2024, President Javier Milei’s administration cut 152,000 public-sector jobs to reduce inefficient state spending, which consumed 12% of GDP with 3.4 million workers.

The move saved $1.2 billion monthly, boosting private-sector growth, and Argentina’s bonds rallied 8% in April 2025