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BUENOS AIRES (Reuters) -Argentina’s monthly inflation rate slowed to its lowest level in more than five years in May, official data showed on Thursday, adding momentum to President Javier Milei’s drive to rid the country of chronically soaring prices.
Prices during the month rose just 1.5% from the month before, national statistics agency INDEC said, well below the 2.0% estimate from analysts polled by Reuters.
Monthly inflation has not been so low since May 2020, when much of the economy was paralyzed by pandemic lockdowns.
Thursday’s monthly inflation data is the lowest yet for libertarian Milei, whose economic policies have helped bring down triple-digit inflation and inspire confidence in investors and the International Monetary Fund, which recently approved a $20 billion loan package.
Members of Milei’s team were quick to offer Thursday’s number as proof that the president’s agenda, marked by austerity and state cutbacks, works.
"Everything is going according to plan," said Finance Secretary Pablo Quirno on X.
"When there’s a fiscal surplus and the printing press slows down, inflation plummets. It’s natural for this to happen. The fundamental laws of economics dictate this," Milei’s spokesman Manuel Adorni added.
In the 12 months through May prices rose 43.5%, slowing from the previous month’s 47.3% rate and below the 44.2% rate predicted by analysts.
Argentina’s double-digit annual inflation rate remains among the world’s highest, vexing everyday consumers who still feel the sting of inflation, even if it is slowing.
"Prices don’t stop rising, maybe 2%, 1%, or half a percent, but it doesn’t stop," said Matias Vilar, a bus driver in Buenos Aires.
Core inflation, often seen as a better indicator of price trends because it strips out volatile products, was slightly higher in May at 2.2%.
In a bright spot for the country’s poor, the price of a basic food basket tracked by INDEC, representing the cost of essential food items to meet minimum nutritional requirements, fell by 0.4% between April and May, the agency said.
Overall, prices of food and non-alcoholic drinks were up half a percentage from April, among the lowest increases among the categories INDEC tracks.
Analysts polled by the central bank see annual inflation falling to 28.6% by the year’s end.