Inflation dips to 1.9% in June, the lowest figure in a year

Inflation in Argentina in June dropped to 1.9%, according to a report published on Tuesday by the National Institute of Statistics and Censuses (INDEC). This figure marks the third consecutive decline following Aprils 2.6% and Mays 2.1%. Furthermore, it is the first time in ten months that the inflation rate has fallen below the 2% threshold. It is also the lowest figure since the 1.6% recorded in June 2025. Core inflation, meanwhile, stood at 1.6%, representing a significant slowdown from the previous months 1.9%. It is also the lowest figure since July of last year. Prices rose 33.5% year-over-year, while cumulative inflation so far in 2026 stands at 16.8%. The numbers under the microscope According to brokerage firm Balanz, goods prices rose 1.4% month over month, while services prices increased 2.9%, reflecting that the disinflation process remains “slower in this latter segment.” By category, seasonal prices posted the largest monthly increase 3.4% driven by higher prices for vegetables and tourism-related services. In the latter case, the increase was linked to a very specific factor: the World Cup. The categories that recorded the sharpest gains were airline tickets, hotel stays, and travel packages. This was also reflected in the breakdown by division, as Recreation and Culture rose 4.2% the largest increase among all CPI components primarily due to higher prices for package holidays. At the opposite end of the spectrum, Clothing and Footwear recorded the smallest monthly increase, rising just 0.4%. Several factors explain this outcome. On the supply side, Argentina’s textile and footwear industries continue to experience a deep recession as they face growing competition from imported products. In fact, according to official data from Argentina’s statistics agency, INDEC, capacity utilization in the sector stands at just 42.4%. This is compounded by household purchasing power, which has yet to recover sufficiently to support a meaningful rebound in consumer spending. The inflation outlook Julin Neufeld, an economist at the liberal think tank Fundacin Libertad y Progreso (LyP), said the institution expects inflation to reach 1.8% in July. He also pointed to an external factor that could work in Argentina’s favor: disinflation in the United States. The June reading of -0.4%, he said, “will weaken the U.S. dollar globally, helping stabilize the exchange rate domestically.” “If restrictive monetary policy and fiscal discipline are accompanied by exchange-rate stability, there would be no reason for this disinflationary trend not to continue to strengthen,” he added. Eric Ritondale, Chief Economist at brokerage firm PUENTE, projected that the disinflation trend will continue gradually over the coming months. He added that the sustained decline in core inflation “confirms the ongoing disinflation process.” However, he cautioned that inflation “will not follow a linear path.” This is due to adjustments in relative prices and the seasonal behavior of certain components of the consumer price index. Santiago Casas, Chief Economist at consulting firm EcoAnalytics, said the outlook “remains favorable” for inflation to continue declining in the coming months. “Fiscal balance and a contractionary policy stance continue to reinforce the disinflation process, making it reasonable to expect inflation to converge toward progressively lower levels during the second half of the year,” Casas said, adding that lower inflation would help improve real wages.