Argentina has long struggled with chronic high inflation, making price stability a key political and economic goal. The latest official data offers a mixed picture of progress and remaining challenges.
A Break in the Trend
On August 13, 2026, Argentina's National Institute of Statistics and Censuses (INDEC) released the July inflation data: prices rose 2.1% month-over-month, bringing the cumulative increase for 2026 to 19.3% and the year-over-year rate to 33.8%. This figure interrupted three consecutive months of slower price growth (June had seen 1.9%) and came in slightly above market expectations (the Central Bank's REM survey predicted 2%).
Economy Minister Luis Caputo celebrated the number, highlighting that the three-month moving average is the lowest since September 2025 and pointing to a historic drop in clothing and footwear (-1.3%). However, the figure raised concerns within the government, which had hoped to break below the 2% threshold.
What Happened to Prices
By category, the Core CPI (excluding seasonal and regulated items) rose 1.8%, while Seasonal prices jumped 4.5% (due to vegetables, tour packages, and accommodation) and Regulated prices advanced 2.1% (public transport, health insurance, and electricity).
The largest increases were:
- Recreation and culture: 5.0% (driven by winter holidays)
- Restaurants and hotels: 2.8%
- Housing: 2.2%
- Food and beverages: 2.0%
On the other end, Clothing and footwear fell 1.3% (the largest monthly decline on record) and Alcoholic beverages and tobacco rose only 1.5%.
The Debate Over the New CPI Basket
While INDEC continues to use weights based on the 2004/05 National Household Expenditure Survey (ENGHo), an update using the 2017/18 ENGHo has been considered since January 2026, but the government decided not to apply it. Two private consulting firms ran simulations:
| Consultancy | July inflation with new basket | 2026 cumulative with new basket |
|---|---|---|
| LCG | 2.5% | 21.3% |
| Equilibra | 2.1% (same as official) | 20.5% |
The difference lies in the weight of services: in the new basket, Housing rises from 9.4% to 14.5%, Transport from 11% to 14.3%, and Communications from 2.8% to 5.1%. Meanwhile, Food drops from 26.9% to 22.7%. Since services rose 3.1% in July while goods rose only 1.6%, a basket with more weight on services yields a higher inflation reading.
What to Expect for August and Beyond
Economist Claudio Caprarulo, director of the consulting firm Analítica, projects August inflation will also hover around 2.1%, with the first week showing stability in food and beverages at supermarkets. "The key is whether it can break below 2% in August," he said in an interview with La Voz en Vivo.
For the end of the year, projections place annual inflation near 30%, still far from the official target of 10.1% budgeted for 2026. Caprarulo warned that despite the slowdown, consumption remains weak: e-commerce is growing but still represents less than 5% of supermarket sales, and investment fell again in the second quarter.
In summary: July's 2.1% is a bittersweet result. On one hand, it confirms that disinflation is advancing – the annual rate is the lowest since 2022. On the other, it shows that breaking the 2% floor is difficult and that the domestic market remains sluggish. The methodological debate over the CPI basket is now firmly on the table and could resurface when INDEC decides to update its weights.
Sources: INDEC, Rosario3, Infobae, La Voz del Interior.