Argentina inflation is forecast to have ended 2025 at more than seven-year low

Argentina’s annual inflation rate ended 2025 at its lowest in more than seven years, a Reuters poll found, implying President Javier Milei’s trade-opening policies and austerity measures have lowered price pressures in South America’s second-largest economy.

The rise in prices of apparel and home appliances slowed last year as Milei’s push to open the country’s economy led to increased competition from a surge in cheaper imports.

Other components of the Consumer Price Index are also likely to have decelerated in response to continuing government steps to curb spending.

Inflation is set to have slowed to 31.0% in December on the year from 31.4% in November, according to the median estimate of 20 economists polled between January 7 and 12.

LOWEST ANNUAL RATE SINCE JUNE 2018?

This would be the lowest annual rate since 29.5% in June 2018. Inflation was 117.8% in December 2024, when Milei’s government was implementing the first steps of its “chainsaw” plan of aggressive spending cuts to stabilise the economy.

On the month, December’s CPI is estimated to have increased 2.5%, the same as in November. Official data are due on Jan 13.

“Clothing and household equipment were among the divisions of the CPI with the smallest variations, partly influenced by trade liberalisation,” Wise Capital analysts said.

In contrast, “services headed the increases, driven mainly by utility bills and rents, reflected in the Housing, Water, Electricity, Gas and Other Fuels division.”

Imports of goods at lower prices from China and Brazil, South America’s industrial powerhouse, rose sharply after Milei eased trade restrictions when he took office two years ago.

The following chart displays the pace of Argentina’s container imports, which usually carry higher value-added goods, from January 2022 to November 2025. The data was gathered by Datamar’s business intelligence specialists.

Argentina Container Imports | Jan 2022 – Nov 2025 | TEUs

Source: DataLiner (click here to request a demo)

In November, the government signed a tariff agreement with the United States. More liberalisation could follow a deal being negotiated between the European Union and the Mercosur bloc that includes Brazil, Uruguay and Paraguay as well as Argentina.

STRONGER PESO HAS ALSO CURBED PRICE RISES

Consumer price rises were also subdued by a stronger peso at the start of 2025, combined with smaller wage adjustments while the country experienced currency instability in the second half of the year.

“Inflation (cooling) was helped in the first part of 2025 by the exchange rate that acted as an anchor,” said Ignacio Ruiz, economist at Ecolatina.

“But from April onwards, it was the wage anchor that compensated for greater exchange rate dynamism in the second half of the year, with electoral uncertainty.”

For the end of 2026 the consensus estimate of analysts in a central bank survey pointed to a yearly inflation rate of 20.1%, which would be the lowest in almost 20 years.

In October the national statistics office INDEC announced the implementation of a new CPI methodology starting with data for January 2026 due next month.

Some economists say this may result in slightly higher inflation readings as the overhaul is set to give greater weight to faster growing prices for services.

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