Argentina is expected to have closed 2025 with its lowest annual inflation rate in more than seven years, according to a Reuters poll, signaling a sharp slowdown in price pressures after years of extreme volatility. The figures reinforce the impact of trade liberalization and strict fiscal austerity promoted by President Javier Milei, whose economic agenda has reshaped the country’s markets.
Economists surveyed by Reuters estimate that annual inflation eased to 31.0% in December, down slightly from 31.4% in November. If confirmed, this would mark the lowest yearly reading since June 2018, when inflation stood at 29.5%. The contrast with recent history is stark. In December 2024, inflation was running at 117.8%, as Milei’s government launched its aggressive spending cuts, often referred to as the “chainsaw” plan.
Slower price growth has been driven by several factors. Most notably, the opening of Argentina’s economy to foreign competition has pushed down prices for goods such as clothing and household appliances. Cheaper imports, particularly from China and Brazil, have increased supply and reduced pricing power in segments that were previously shielded by tight trade controls.
According to analysts, other components of the consumer price index also cooled as the government continued to curb public spending. While goods inflation softened, services told a different story. Utility bills and rents were among the fastest-rising items, keeping upward pressure on the housing, water, electricity, gas and other fuels category.
Trade liberalization has been central to this shift. Since taking office, Milei has dismantled multiple import restrictions, encouraging a surge in lower-priced goods. In November, Argentina signed a tariff agreement with the United States, and further opening could follow if negotiations between the European Union and the Mercosur bloc reach a final deal.
Currency dynamics also played a role. A stronger peso during the first months of 2025 helped contain price increases, acting as a temporary anchor for inflation. Later in the year, as exchange rate volatility returned, wage restraint compensated for currency pressures, limiting the overall impact on consumer prices. Economists note that smaller salary adjustments, combined with political uncertainty ahead of elections, contributed to keeping inflation in check.
Looking ahead, expectations remain cautiously optimistic. A central bank survey shows analysts forecasting inflation of around 20.1% by the end of 2026, which would be Argentina’s lowest level in nearly two decades. However, changes in methodology could complicate comparisons. The national statistics agency INDEC has announced a new CPI calculation starting with January 2026 data, potentially giving more weight to services, where prices tend to rise faster.
As a result, future inflation readings could appear slightly higher even if underlying trends remain stable. Still, after years of chronic inflation, the latest estimates suggest Argentina may finally be entering a period of sustained disinflation, reshaping expectations for households, investors and policymakers alike.