Argentina’s Inflation Forecasted to Rise Slightly in February

Argentina’s inflation rate is expected to rise to 2.4% in February, slightly above January’s rate of 2.2%. Although efforts to control inflation have been made, challenges persist in stabilizing prices, particularly in food sectors. Analysts predict ongoing inflationary pressures in March due to seasonal factors.

Recent analyses indicate that Argentina’s inflation rate is likely to see a marginal increase in February, surpassing January’s figures. According to a Reuters survey, the consumer price index (CPI) is projected to rise by 2.4% in February, up from the previous month’s 2.2%, as forecasted by 24 analysts.

Argentina’s economic situation remains challenging, characterized by triple-digit inflation, currently recognized as having the highest annual inflation rate worldwide. Although the annual rate neared 300% last year, it has recently decreased, closing 2024 at 118%. Monthly inflation, which peaked at approximately 25% in December 2023, has stabilized between 2% and 3% since October 2024.

Eco Go, a consulting firm, highlighted that the government has yet to fully achieve its goal of reducing inflation below 2%. Their report indicated, “Efforts to slow inflation included lowering the crawling peg to 1%, intervening in the exchange rate gap, and the discretionary updating of tariffs – which remained considerably below inflation – all aimed at moderating the indicator, but with limited success.”

Additionally, the Market Expectations Survey (REM) by Argentina’s central bank suggested a 2.3% inflation projection for February, with an anticipated rate of 2% for March. The foundation Libertad y Progreso (LyP) noted that although early February CPI increases were lower than in January, the latter half of the month saw unexpected price rises, particularly in food items like meat.

Economist Clara Alesina from LyP added, “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.”

Overall, analysts project a slight acceleration in inflation for March as various economic factors come into play.

In conclusion, Argentina’s inflation is anticipated to increase in February, with a forecasted CPI rise of 2.4%. Although government measures to manage inflation have shown limited success, analysts expect continued pressure on prices due to seasonal factors. With Argentina facing significant economic challenges, the path to stabilizing inflation remains complex and ongoing.

Original Source: www.marketscreener.com