Argentina’s Inflation Trends and Projections for February 2025

Argentina’s inflation rate is expected to rise to 2.4% in February from January’s 2.2%, according to a Reuters poll. The country has been grappling with high inflation rates, with annual inflation reaching 118% in 2024, after peaking near 300% last year. Despite efforts to control inflation, challenges remain significant as seasonal pressures could maintain upward price momentum in March.

A recent Reuters poll indicates Argentina’s inflation rate is projected to rise slightly in February, reaching an estimated 2.4%, compared to January’s 2.2%. Analysts attribute this rise to various economic challenges faced by Argentina, which has been experiencing notably high inflation rates in recent years, including an annual rate nearing 300% last year, ultimately stabilizing at 118% in 2024. Monthly inflation, after a peak of approximately 25% in December 2023, has been fluctuating between 2% and 3% since October 2024.

Consulting firm Eco Go remarked that the government’s efforts to control inflation have not fully succeeded: “the government’s goal of breaking the 2% barrier has not been fully realized, and in February, inflation may have even accelerated,” underscoring ongoing economic difficulties. The firm also noted that attempts to restrict inflation, including lowering the crawling peg and adjusting tariffs, have yielded limited results.

The Argentine central bank’s Market Expectations Survey (REM) projects February’s inflation to be around 2.3%, with a further drop to 2% anticipated for March. However, the foundation Libertad y Progreso (LyP) highlighted a divergent trend, noting that CPI increases during the first half of February were subdued compared to January, yet rose unexpectedly in the latter half, particularly due to surging prices in food and non-alcoholic beverages.

According to economist Clara Alesina from LyP, inflation is expected to maintain momentum despite recent trends: “Despite the downward trend (of the CPI), a slowdown is not expected in March. The start of the school year and the reactivation of key sectors could generate some seasonal pressure on prices.” This repeated acceleration amid seasonal factors poses challenges to broader economic stability.

In summary, Argentina’s inflation is projected to rise slightly in February, driven by seasonal economic pressures and persistent challenges in controlling prices. Although efforts have been made to curb inflation, results have been mixed. Analysts remain cautious as the situation evolves, indicating the potential for continued inflationary pressures in the coming months, particularly with the new school year approaching.

Original Source: money.usnews.com