INDEC reveals uptick in inflation: Prices up 3.7% in March

Inflation in Argentina shot up sharply in March, with consumer prices rising 3.7 percent – the highest monthly rate since September.

Consumer prices rose for a second consecutive month, following an increase of 2.4 percent in February – 0.2 points up on January’s 2.2 percent.

Over the last 12 months, inflation – which for the most part has been tamed over the first 16 months of President Javier Milei’s government – now totals 55.9 percent, with prices up 8.6 percent since the turn of the year.

Price hikes in March were driven by a huge increase in the cost of education, which soared 21 percent, with rises at all age groups due to the start of the school year.

Food and non-alcoholic beverages, one of the most influential categories, rose 5.9 percent, with notable increases for vegetables, meat and related products.

The two divisions that recorded the smallest increases were alcoholic beverages and tobacco (up 0.8 percent) and recreation and culture (0.2 percent).

At category level, seasonal prices increased 8.4 percent, with core inflation of 3.2 percent. 

The national figure from INDEC was published just a few days after the Buenos Aires City government reported that consumer prices rose 3.2 percent in the capital last month. 

Notable increases were seen in food and non-alcoholic beverages (4.7 percent) – with vegetables and legumes soaring 25.8 percent – and education (14.3 percent).

The March figure will be met with some concern by the Milei government, which is facing crucial midterm elections later this year. 

Private consultancy firms had predicted a slight acceleration of inflation from the previous month, expecting a figure of 2.5 percent, but INDEC’s final rate overshot those expectations.

The most recent Central Bank survey of market expectations produced an annual 2025 forecast of 27.5 percent, up 4.2 points on the previous month. The Milei administration projects a figure of 18 percent for the year.

INDEC’s figure for March was released in the same week that the International Monetary Fund confirmed details of a new US$20-billion funding deal for Argentina, in addition to its existing US$44-billion programme.

The IMF on Tuesday announced it had reached a preliminary agreement with Argentina on a four-year loan arrangement to support a "comprehensive economic program."

It said the agreement built on "the authorities' impressive early progress in stabilizing the economy, underpinned by a strong fiscal anchor, that is delivering rapid disinflation and a recovery in activity and social indicators."

The prospect of another IMF loan has caused a run on the peso, prompted by fears – which Milei has rebuffed – that the new deal could entail a possible currency devaluation.

The loan was expected to be approved by the IMF executive board as soon as Friday.

Argentine stocks on Wall Street and the domestic MERVAL index rose in early trading Friday in expectation of an announcement. 

The MERVAL was up four percent, driven by increases for Pampa Energía (4.9 percent), Loma Negra (4.7 percent), TGN (4.7 percent), and Cresud (3.7 percent), among others.

Argentina’s country risk rate, tracked by JP Morgan, stood at 914 points.

– TIMES/PERFIL/NA