Inflation drops to 1.7% in August, the lowest in 14 months

Inflation in Argentina in August fell to 1.7%, according to a report published on Thursday by the National Institute of Statistics and Censuses (INDEC).

This figure marks a slowdown from the 2.1% recorded in July. It is also the second time in 2026 that the inflation rate has fallen below the 2% threshold.

It is the lowest monthly figure since the 1.6% recorded in June 2025. It is also the third-lowest rate recorded during the Milei administration.

Core inflation, meanwhile, stood at 1.8%, unchanged from the previous month, amid increases in housing rentals and cultural services.

The headline inflation figure was lower than the core rate due to a 0.9% decline in seasonal goods and services in August.

Prices rose 33.5% year-on-year, while cumulative inflation so far in 2026 stands at 21.3%.

Largest and smallest variation 

The division with the largest increase during the month was housing, water, electricity, gas, and other fuels (2.8%), while the second-largest increase was recorded in education (2.5%).

At the other end of the spectrum, the two divisions with the smallest changes nationwide were recreation and culture (0.0%) and clothing and footwear (-0.6%).

The government celebrated the news. “VAAAAAAAAMOOOOOO TOTO…!!!,” President Javier Milei posted, referring to Economy Minister Luis “Toto” Caputo.

While the figure is positive news for the economic team, it is worth noting that it fell well short of the original forecast made by Milei himself at the beginning of the year.

At the time, the libertarian president had predicted that the August inflation figure would begin with “0,…”

Broken down by goods and services, services recorded the largest increase, rising 2%, while goods rose 1.4%.

Services rising faster than goods has been a constant since Javier Milei took office. The last time this did not happen was in January 2024, the second month of the current administration.

This is partly explained by the deregulation of public utilities and healthcare services, as well as the decline in domestic consumption and the surge in imports from Asia, particularly China.

The most representative example of this can be seen in the clothing and footwear division measured by INDEC, which recorded a 0.6% decline during the month.

This was the second consecutive decline — following a 1.3% drop in July — and the seventh decline in the past 20 months, a figure that Economy Minister Caputo highlighted on social media.

The figure was in line with the forecast in the latest Market Expectations Survey (REM) conducted monthly by the Central Bank among consulting firms and financial institutions.

The same survey estimated that inflation would see a slight rebound, reaching 1.8% in September, before gradually slowing to 1.6% in February 2027.