4% in July, the lowest in 30 months

The inflation rate of 4% in July was the lowest recorded since January 2022. The data consolidates forecasts of a fall in 2024, which place inflation between 120% and 130%.

If this happens, inflation will show a reduction of 80 to 90 percentage points compared to 211% in 2023.

According to the Central Bank’s Market Expectations Survey (REM), consultants estimated inflation of 3.8% in August. It is the first time this year that private projections are below the Indec measurement. From now until the end of the year, forecasts range from 3.6% to 3.8%, with the sole exception of November, with 4%. This marks a drop in projections, as in the June REM a value above 4% was expected for all months.

Based on these projections, the average consulting firm expects inflation of 127.4% for the year, while the 10 firms with the most accurate forecasts see it at 122.2%.

Inflation estimates decreased throughout the year. At the beginning of Javier Milei’s administration, 227% was expected for the entire year. The same applies to 2025: eight months ago, the forecast was 58.9% and now it is 41.3%.

For 2026 the drop is less drastic: it drops from 30.7% in surveys carried out in December 2023 to 25% in those carried out in July this year.

The reduction in forecasts is a consequence of a combination of factors: the monetary policy that interrupted the issuance of pesos and imposed a reduction in public spending, the recession that slowed sales and forced prices to fall, and the stability of the dollar, which has rose 2% per month on the official record and with alternative quotes moving within a limited margin.

On the other hand, the FocusEconomics Consensus Forecast projects an average inflation of 236.1% in 2024. Unlike the REM, in this case there are many international consultancies that do not measure the daily pulse of the real economy. These analysts predict an increase of 70.3% on average in 2025. In this case, the projections are more exaggerated because they start from a higher base: in January they predicted 280% for 2024.

“Inflation may have peaked in May and our consensus is that it will decline later this year. However, by the end of 2024, inflation will still be very high, above 100%, driven by the weakening of the currency and the elimination of price controls”, they state. For economist Camilo Tiscornia, director of C&T Consultores, “it will largely depend on the scenario and the extent to which the government will be able to maintain its exchange rate policy, which is a fundamental factor. It is very difficult to define a single scenario. For this year, we think there is a good chance that things will continue like this, we see inflation closer to 120%.”

“Next year, we’ll see, it’s much more difficult to predict. If the government is more or less successful in what it proposes, there would have to be a very significant reduction. Even if along the way there is a slightly stronger correction in the exchange rate, if the fiscal and monetary adjustment persists, next year we will have much lower inflation, 40% could be a reference rate. But there are still many unknowns in terms of economic policy, mainly how the government will deal with the exit from the cepo (restriction on the purchase of foreign currency)”, says Tiscornia.

Economist Matías Surt, from the consultancy Invecq, states that “for December 2024 we project 130%, with the hypothesis of exchange rate adjustment before the end of the year. For December 2025 it is quite complex, but we expect an annual rate of less than 50%.” Economist Fernando Marull, director of FMyA, agrees with the forecast of 130% for this year and 40% for the next.

Expert Rocío Bisang, from the consultancy EcoGo, highlights that for this year they estimate inflation of 120.2%. “For 2025, for now we are working with two scenarios, one more optimistic than the other, where the difference is mainly the amount of dollars coming in and the government’s ability to accumulate reserves. In the first, the most optimistic, inflation is close to 30%; in the second, we think it could be a little above 50%”.