Inflation in Argentina sped up for the fifth straight month in January as Javier Milei confronts the fallout from the resignation of the head of national statistics agency because of a disagreement with the president.
Consumer prices rose 2.9 percent last month compared to December, above the 2.4 percent median estimate of analysts surveyed by Bloomberg and a tick above the previous period. From a year ago, the inflation rate rose to 32.4 percent, according to data published Tuesday by the INDEC national statistics bureau.
Food, restaurants, hotels and utilities led all categories in price increases last month.
The figures come after former INDEC chief Marco Lavagna abruptly resigned last week as Milei postponed the agency’s decision to begin publishing inflation data with a new methodology that would have taken effect with the January report. Argentina’s current inflation index is based on a basket of goods that hasn’t changed in two decades and it’s widely considered to be outdated.
Officials from the International Monetary Fund are also in Buenos Aires this week to review the government’s US$20-billion programme, and they’re expected to specifically discuss the timing of the new methodology. The IMF hasn’t commented yet on Milei’s decision to postpone the new version.
Economy Minister Luis Caputo has been trying to contain the repercussions, noting that Argentina’s inflation-linked bonds didn’t move on Lavagna’s resignation. Caputo says Lavagna left on good terms but that he and Milei didn’t agree with him on when to implement the new basket of goods – which is expected to give greater weigh to services that didn’t exist 20 years ago – until inflation cooled further.
While consumer price hikes have slowed significantly since Milei took office facing triple-digit inflation rates, he’s struggling to push ahead with his austerity agenda partly by cutting subsidies on utility bills and quell inflation at the same time. After monthly inflation touched 1.5 percent in mid-2025, it’s gradually crept up due to a range of factors.
Beyond January, the risks to the upside look set to increase. Milei plans to raise consumers’ electric and gas bills again in February to help maintain the government’s fiscal surplus. Costs for education and clothing also tend to jump in March with the return of school in the Southern Hemisphere.
Inflation is still expected to cool this year, albeit at a slower pace. Economists surveyed by the Central Bank in January had forecast 22 percent annual inflation by the end of the year.
by Patrick Gillespie, Bloomberg
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