INDEC reveals Argentina's 2024 inflation rate: 117.8%

Consumer prices in Argentina rose 117.8 percent last year, President Javier Milei’s first full year in office, nearly 94 points lower than in 2023, according to government data.

Inflation, the perennial bugbear of Latin America's second-biggest economy, totalled 2.7 percent in December, up slightly from the 2.4 percent recorded in November.

Nevertheless, it is the third straight month that consumer price hikes in Argentina have remained under the three-percent benchmark. 

When Milei’s budget-slashing government took office last December, inflation in his first month in office, propelled by a fierce devaluation of the peso, exceeded 25 percent.

But by November 2024, it had fallen to its lowest level in over four years on the back of a drastic austerity programme, which has included the over 33,000 public sector lay-offs, government downsizing and the vetoing of inflation-aligned pension increases.

In a statement, the Economy Ministry boasted that it had “pulverised” inflation.

"In just 12 months we pulverised inflation," the portfolio wrote on X, adding that "the data reflects the success of the stabilisation plan" launched by Milei when he came to power.

Most analysts had expected a December figure of below three percent, though not necessarily a deceleration from the previous month. Most forecasts settled on 2.7 percent, with experts predicting a reduction of interest rates by the Central Bank would follow.

The report filed by the INDEC national statistics bureau on Wednesday was directly in line with expert predictions.

Housing, water, electricity, gas and other fuels was the category rising the most at 5.3 percent last December, propelled by rises in rent and utilities. 

Food and non-alcoholic beverages, always closely watched, rose 2.2 percent, thanks to hikes in meat and meat-related products, bread and cereals, and milk and dairy items. 

The two divisions recording the lowest increases in December were clothing and footwear (1.6 percent) and household equipment and maintenance (0.9 percent).

Reflecting the coming vacation season, restaurants and hotels rose 4.6 percent across Greater Buenos Aires.

Inflation first fell below the three-percent mark back in October (2.7 percent), slowing even further to 2.4 percent in November – the lowest monthly rate in four years.

Inflation in Buenos Aires City was 3.3 percent in December, with consumer prices rising 136.7 percent in 2024 overall.

Milei’s measures, which plunged Argentina into a deep recession, were accused of tipping an additional five million people into poverty in the first half of 2024. 

Poverty affected 53 percent of the population in the first half of 2024, up 11 points from December 2023, although there are indications that the figure fell in the second half. Updated data is due in March.

Meanwhile, Milei has swatted away criticism, insisting that what he presents as short-term pain will lead to long-term gains for the economy.

Writing on X, Economy Minister Luis Caputo said the figures showed "the continuity of the disinflation process."

It attributed the slight rise in December's prices to "seasonal" factors, linked to the end-of-year holidays and the southern hemisphere's summer holidays.

In a speech last month celebrating his first year in office, Milei promised that inflation would soon be “a bad memory” for Argentines, assuring them that “happy times are coming.”

– TIMES/NA/AFP