Consumer prices in Argentina accelerated to an annual 32.4pc in January, marking a third month of annual gains.
Inflation rose from 31.5 in December after reaching a cyclical low of 31.3 in October, statistics agency Indec reported on Tuesday.
Annualized inflation had come down steadily after peaking at nearly 300pc in March 2024. That trend stopped in November. Annualized inflation in January is still well below the 84.5pc recorded a year ago, but the latest steady upwards march in prices poses a challenge to President Javier Milei's government.
Housing and related services rose by an annual 40.2pc in January, while transportation rose by an annual 32.8pc in January and education costs rose by 52.4pc.
Monthly grind
Monthly inflation has been increasing since last May, when it stood at 1.5pc. It reached 2.9pc in January.
Higher monthly consumer prices in January were led by a 4.7pc increase in the food/beverage category, a 4.1pc increase in the restaurant/hotel category and 3.6pc increase in the communication category.
Milei's government had initially pegged inflation in single digits for this year, but adjusted up the target to 10.1pc when it finalized the 2026 budget. It could miss that and its agreed-upon targets with the IMF if inflation does not start to recede.
The administration also had to contend with an unexpected economic slowdown in November, with GDP contracting by an annual 0.3pc that month from a 3.2pc increase in October. It was the first annual contraction for a month since September 2024, according to Indec.
The government is now banking on strong exports, a big uptick in private investment and a new trade agreement with the US to boost economic growth and bring down inflation.
Exports in 2025 were $87.1bn, up 9.3pc, according to the Foreign Affairs Ministry and the administration forecasts that growth this year will be led by energy and mining. The government anticipates oil/gas and mineral exports alone will top $75bn in the coming decade. The Argentinian and US governments signed a reciprocal trade and investment agreement on 5 February. It eliminates barriers on a wide range of goods.
By Lucien Chauvin
