Argentina’s inflation fell below 4% monthly for the first time since Javier Milei governed. In September, the Consumer Price Index was 3.5% and in the last twelve months it accumulated 209%, according to Indec, the official statistics agency. These numbers keep Argentina on the world podium of countries with inflation, but allow the Government to once again display a downward curve after the setback in August, when it was 4.2%, two tenths more than in July.
The CPI data for September breaks the 4% plateau at which prices had stagnated since May and moves even further away from the exorbitant 25.5% monthly increase with which the far-right leader inaugurated his presidential administration in December. This is the lowest monthly value since November 2021, when Argentina left the covid-19 pandemic behind.
In September, the advance of the CPI was led by the increase in the prices of housing, public services and fuel, which increased by 7.3%, especially due to the withdrawal of state subsidies for electricity, gas and water. Clothing and footwear (6%), education (4.3%), and restaurants and hotels (3.7%) also recorded above-average increases.
On the contrary, the price of food, the item with the greatest impact on the inflation index, increased by 2.3% and contributed to the general decrease in the CPI. Food is also below average year-on-year, with an increase of 201% compared to the general 209% in the last 12 months.
The data has meant another good news for the Government after the legislative victory achieved this Wednesday, when the Chamber of Deputies barely endorsed the presidential veto of the law that increased salaries for teachers at public universities.
Unlike his predecessors, who tried unsuccessfully to defeat inflation, Milei’s strategy against this chronic evil of the Argentine economy is beginning to have visible results. However, experts warn that keeping prices in check will be a greater challenge when the economy leaves the current recession behind – the IMF predicts a drop in GDP of 3.5% by 2024 – and the Government lifts the exchange restrictions that it They allow intervention in the price of the peso.
Almost a thousand dollars to not be poor
In addition to reporting the monthly CPI, Indec also released this Thursday the evolution of the price of the Total Basic Basket (CBT), that is, the minimum amount of food, clothing and services necessary to avoid falling below the poverty line . According to the official report, the CBT increased 2.6% in August and cost 964,620 pesos (about $965, at the official exchange rate) for a couple with two minor children. This basket, which excludes rent, is equivalent to 3.5 minimum wages.
The Basic Food Basket (CBA), which includes only the food necessary to live, increased by 1.7% and cost 428,720 pesos for that same family group. Those who do not reach that monthly figure are considered indigent.
Poverty data is tied to the values of these basic baskets and in the first half of the year they recorded record numbers for the last two decades. According to Indec, in the middle of the year 53% of Argentines were poor, eleven points more than in December, while indigence reached 18.1% of the population.
If the increases in these baskets remain below general inflation, it is likely that the second half of the year will see a reduction in both poverty and indigence.
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