Argentina's inflation continued to ease in February, falling to its lowest since June 2022.
The consumer price index fell to an annualized 66.9pc in February from 84.5pc in January and compared with 117.8pc in December, agency Indec reported on 14 March. Inflation peaked at 292pc in April 2024.
On a monthly basis, inflation ticked up by 2.4pc in February from the prior month, when it came in at 2.2pc, the lowest since mid-2020.
The government is targetting annual inflation to fall to 20pc for 2025, while international agencies and banks put it above 30pc.
Lowering inflation is a central tenet of president Javier Milei's government, in office now 15 months, as it works to grow the economy and attract investment. It is also key to a new deal the government wants with the International Monetary Fund (IMF).
The government is forecasting growth in domestic product at 5pc in 2025. The economy contracted by nearly 2pc in 2024, an improvement over the 3.8pc decline forecast by the government and the IMF's estimated 5pc contraction.
It is hoping for a flood of investment from an incentive law for large investments (RIGI), which was approved last year as part of an omnibus law to reduce the size of the state. The government expects a minimum of $20bn investment to be approved in 2025.
A cornerstone of the improvement is a new agreement with the IMF, which will be used to ease capital controls and pay down the treasury's debt with the central bank.
On 11 March, the government submitted a draft decree to Congress for approval of the IMF deal. The decree stated that the new IMF facility would include a repayment period of 10 years with a grace period of four and a half years. The decree does not include amounts, but a report from US investment bank Citi stated that it would be between $15-20bn.
The government is still repaying the $44bn agreement with the fund agreed to the previous decade.
By Lucien Chauvin
