Monthly inflation in Argentina ticked up by 0.4 points to 4.6%, figures released on Friday afternoon by the INDEC statistics bureau showed. The results represented the first increase after five decreases in a row.

Yearly inflation ticked down four points to 271.5% in June. Prices have risen 79.8% in the first half of the year.

In a Thursday interview with the La Nación + TV station, Argentine President Javier Milei said that “oscillations” in the inflation decrease were a possibility. “Don’t think it’ll be a uniform rectilinear motion,” he said. “We are reshaping relative prices.”

The previous day, the president also lambasted economists who had predicted that inflation would rise in June.

“It’s going to be less than five. All the scammer economists will be left with egg on their face, because every one of them said that [monthly inflation would be] between 5.5% and 6.5%,” Milei said. “They all lost.”

Consultancies that answered the Central Bank’s market expectations survey published at the beginning of July said, on average, that June’s monthly inflation would be 5.2%.

The Economy Ministry said that Friday’s numbers were “consistent with a deepening of the disinflation process.”

The biggest monthly increase was in housing and utilities, which surged by 14.3% driven by rises in electricity, gas, and rents. It was followed by restaurants and hotels, with a 6.3% increase, and then education (+5.7%) due to a price rise in school fees.

The INDEC also published a report stating that in June, the poverty line for a four-person household was AR$873,169 (US$909 at the official rate, US$620 at the MEP rate). That represents a 2.6% monthly increase and a 275.7% yearly surge.

What to expect in July

Apart from its harsh austerity policies, the government hopes to thwart inflation by keeping a crawling peg scheme that devalues the peso by 2% per month. Meanwhile, the “blue” or informal U.S. dollar rate rose by AR$80 to AR$1,500 on Friday, its highest value ever recorded. The gap between the official and the informal rate is 62%, the highest of the Milei era.

Carlos Rodríguez, an economist who was part of Milei’s team until November, heavily questioned the president’s economic plan in a post on X. “Using the cepo [foreign exchange restrictions] to hold down the devaluation rate at a low level, and sitting back and waiting for inflation to converge to that level, is a policy that does not work,” he wrote.

Rodríguez compared Milei’s economic policy to that of José Martínez de Hoz, the economy minister during Argentina’s dictatorship in the 1970s. Martínez de Hoz famously created the tablita (the “little table”) which detailed the percentage the government would devalue the peso from January until August 1979. However, inflation increased way beyond the depreciation of the peso during that period, forcing Martínez de Hoz to resign. His successor went on to devalue the currency three times.

Planned increases to energy, fuel, and public transportation drove the uptick in inflation in June. The government will postpone gas, electricity and fuel tax hikes in July in light of this.

However, the government also deregulated telecoms prices at the end of June. Economic consultancy Portfolio Personal Inversiones (PPI) calculated that this would increase July’s inflation by 1.2 points.

“The back-and-forth in regulated price increases gives mixed signals to the market, as they lead us to think that the realignment of relative prices (key to finish the stabilization process) has a long way to go,” the firm noted. It added that high-frequency data from the first two weeks of July show that price rises are speeding up.