Argentina’s inflation ticked up more than expected in October

Argentina’s inflation ticked up slightly in October on the heels of September’s pick-up, pointing to sticky price pressures that pose a challenge for President Javier Milei ahead of next year’s election.

Consumer prices rose 2.2 percent last month, above the 1.9 percent median estimate of analysts surveyed by Bloomberg. From a year ago, inflation ticked down to 33.1 percent from 33.4 percent, according to government data published Thursday.

Housing and utilities saw the biggest increases, at 4.2 percent, driven by a hike in natural gas prices. Recreation and culture followed. Core inflation, a priority for the government, came in at the lowest since July 2025 at 1.5 percent.

Lowering inflation remains Milei’s top priority and signature achievement since taking office three years ago, when annual price increases were in the triple digits. But his government has leaned on the currency to contain prices, a strategy economists warn is weighing on credit and growth and raising questions about how long it can prioritise disinflation without further hurting activity.

The government insists the two goals aren’t incompatible.

Growth, however, has been weaker than economists anticipated and concentrated in sectors that generate relatively few jobs. 

Argentina’s economy contracted in the second quarter, and economists surveyed by the Central Bank last month expect another decline in the third, which would put the country in a technical recession. They now forecast growth of 0.7 percent for 2026, down from their 3.2 percent forecast at the start of the year.

Concerns about the economy are also rattling markets. The extra yield investors demand to hold Argentine debt has more than doubled from its July low as worries over Milei’s re-election prospects next year creep in. In a regular press conference Thursday, IMF spokeswoman Julie Kozack cautioned against placing too much of an emphasis on short-term market movements. ​