Argentina Inflation Rises 1.9% August Amid Peso Pressure

Argentina's inflation rate in August rose by 1.9%, slightly below economists' expectations and matching the previous month's increase, continuing a trend of slowing inflation. The annual inflation rate slowed to 33.6%, the lowest in seven years, driven mainly by increases in transport, food, and regulated prices such as cigarettes, while some categories like clothing saw price decreases. Despite currency volatility and peso depreciation, the pass-through to consumer prices has been limited so far due to restrictive monetary policies including higher interest rates, which have helped absorb excess liquidity but could negatively impact consumption and economic activity. Analysts attribute seasonal factors and regulated price hikes as main contributors to the monthly inflation, with the government of President Javier Milei achieving significant disinflation in his first year through aggressive stabilization policies. However, ongoing currency pressures and political challenges, including electoral concerns and opposition activity, pose risks to sustained price stability. Official inflation data was expected to be released in early September, confirming these trends noted by various economic surveys and consulting firms.