BUENOS AIRES - A survey of economists found Argentina's monthly inflation rate likely slowed in February, with analysts pointing to seasonal easing in certain food and services categories as the main driver of the deceleration. However, the annual inflation trend is expected to remain high, complicating the government's aim of eradicating inflation early next year.
The median estimate from 20 economists polled between March 4 and March 9 put the Consumer Price Index (CPI) increase for February at 2.7%. That would represent a moderation from January's 2.9% monthly rise, when higher prices for vegetables, fruit and tourism-related services joined persistently hot categories such as meat and public utilities in pushing consumer prices up.
If confirmed by official figures scheduled for release on Thursday, the February reading would be the first monthly deceleration since June and would reflect softer price dynamics in the same segments that surged during the Southern Hemisphere summer vacation period.
Despite the anticipated monthly slowdown, the year-on-year CPI is expected to show a 32.7% increase, slightly above January's 32.4% annual rate. The persistence of elevated annual inflation underscores the difficulty of returning to low inflation even as monthly readings fluctuate.
Market and policy reactions
Martin Polo, senior economist at Cohen Aliados Financieros, characterized recent inflation behavior as a modest acceleration over recent months but not a sharp one. "The good thing is while inflation has accelerated a little in recent months, it’s not very strong; it’s a gradual increase," he said. He added that the government has been unable to further temper inflation despite monetary adjustments and a stable exchange rate, suggesting monetary policy may not be sufficiently effective to drive inflation down to zero percent, a situation he described as harmful given stagnant wages.
President Javier Milei has repeatedly pledged to bring inflation to zero, most recently reaffirming that target in a television interview and setting a deadline for August. Inflation exceeded 200% when he assumed office at the end of 2023.
Forward-looking considerations
A monthly central bank poll released last week showed economists still expect a slowing trend for inflation, although their consensus for year-end 2026 inflation rose in the most recent survey compared with January. The February economist views were compiled before the outbreak of the Israel-U.S. war on Iran and its early impact on global energy markets, which has since contributed to higher gasoline prices.
The evolving global energy situation and domestic price dynamics mean official data and subsequent market reactions will be closely watched for signs of persistent inflationary pressure or renewed volatility.
Summary
Poll respondents expect a modest monthly slowdown in Argentina's CPI for February to 2.7%, driven by seasonal easing in food and tourism-related services, while the year-on-year rate is expected to rise to 32.7%. Policymakers face the dual challenge of containing annual inflation and meeting ambitious political commitments to drive inflation to zero.