Argentina’s Inflation Projected to Rise Slightly in February

Argentina’s inflation rate is projected to rise to 2.4% in February, up from 2.2% in January, according to a Reuters poll. Efforts to control inflation have shown limited success, with the economic situation exacerbated by significant price hikes in essential goods. Analysts anticipate further inflation increases in March driven by seasonal factors and revitalization in key sectors.

In a recent Reuters poll, analysts projected that Argentina’s monthly inflation rate is anticipated to increase slightly in February. This forecast indicates a rise to 2.4%, an uptick from January’s 2.2%. The consensus emerged from a survey of 24 analysts ahead of the official data release scheduled for Friday.

Argentina, recognized for being a significant grains exporter and an emerging energy producer, has been enduring triple-digit inflation rates. This economic challenge has rendered it as having one of the highest annual inflation rates worldwide, approaching 300% in early 2023 but declining to 118% by the end of 2024. Monthly inflation, which peaked around 25% in December 2023, has remained in the 2% to 3% range since October 2024.

Eco Go, a consulting firm, noted in their report that the government’s objective to limit inflation to below 2% has not yet been achieved. They remarked, “In February, inflation may have even accelerated.” Various measures to mitigate inflation included reducing the crawling peg to 1% and intervening in the exchange rate, although these have had limited success.

The Central Bank of Argentina (BCRA) conducted a Market Expectations Survey (REM) forecasting a 2.3% inflation rate for February, with an expectation of 2% in March. The foundation Libertad y Progreso (LyP) indicated that CPI increases during the first half of February were relatively restrained compared to January, raising hopes for a reduction in inflation.

However, LyP also observed that increases in the latter half of the month surpassed expectations, driven primarily by rising prices in Food and Non-Alcoholic Beverages, especially meat. Analysts predict further inflation acceleration in March due to seasonal price pressures related to the new school year and the revitalization of essential sectors, with economist Clara Alesina stating, “Despite the downward trend of the CPI, a slowdown is not expected in March.”

The current analysis indicates a modest rise in Argentina’s inflation rate for February, reflecting ongoing economic challenges. Despite measures implemented by the government, inflation has shown persistent tendencies. As the economy navigates pressures from seasonal expenditures and specific commodity price hikes, the outlook for March remains cautiously pessimistic regarding inflation stabilization.

Original Source: www.marketscreener.com