Prices in Argentina increased by 2.8% in April, almost one point below the same figures for March, according to a report published on Wednesday by the government’s statistics institute, the INDEC. Year-on-year inflation rose by 47.3%.

It is the first month-to-month drop in two months, as inflation had been rising since February, fueled by uncertainty over a deal with the International Monetary Fund (IMF) that was eventually struck in April.

April’s inflation was driven by food and non-alcoholic beverages, which went up by 2.9% due to increased prices in meats and derivatives, dairy products, eggs, bread, and cereals. The divisions with the steepest hikes were restaurants and hotels (+4.1%) and recreation and culture (+4%).

Prices rose by 11.6% in the first four months of 2025.

The market had forecasted higher increases for the month after the Central Bank stopped devaluing the peso by 1% a month and adopted a currency band scheme as part of the deal with the IMF. Banks and consulting firms surveyed by the Central Bank were expecting an inflation rate averaging 3.2% in April.

Economy Minister Luis Caputo celebrated the figures in a press release stating that “the combination of fiscal surplus, fixed amount of money and free exchange rate will deepen the disinflation process observed since last year.”

In order to contain price increases, the government forced a recession after devaluing the currency by more than 50%. After that to control inflation, they adopted a ‘crawling peg’ scheme — a controlled and gradual devaluation of the Argentine peso..

The national administration has recently used salaries as an anchor for prices. For example, the trade employees’ union, the FAECYS, reached an agreement with the sector’s business chambers for a 5.4% salary increase. However, the Labor Secretariat did not validate it as the rise was over 1% a month.

A report by the Center of Argentine Economic Politics (CEPA) said the government this month also froze utility rates, fuels, medications, and prepaid healthcare prices. They also made announcements to take the exchange rate to the band’s lower end and pressured supermarkets to lower prices, according to the report.

Sebastián Menescaldi, an economist and associate director of EcoGo consultancy, said that the change in the exchange rate scheme did not have a big impact on prices. 

“Going forward, as there are no factors affecting price formation, we forecast that [the inflation rate] will continue to fall,” Menescaldi told the Herald, adding that the firm’s preliminary forecast is that prices will go up by 2.2% in May. The economist added that the figure would continue to drop as long as there is a U.S. dollar supply in the foreign exchange market, as long as politics does not generate any uncertainty going forward.

The government, however, is not buying reserves in the foreign exchange market, but expects to accumulate them by issuing debt. “They do not want to issue more pesos [to buy U.S. dollars] that will return to the market and generate more inflation,” said Menescaldi. 

“I would be calmer if the government were buying reserves, even if the exchange rate or inflation could be a little higher,” he added. “That would give more sustainability to the process because one thing is having dollars that you borrow for six months, and another is having dollars because someone wanted to have pesos — they would stay in the economy for a longer term.”