According to the National Institute for Statistics and Census, year-on-year inflation hit 102.5%, and marking the highest inter-annual inflation rate and the highest February rate since 1991. 

According to its latest report, consumer prices in Argentina rose by 6.6% in February, compared to 6% in January — then the highest monthly figure since August 2022. The total inflation for the first two months of the year was 13.1%

The report vs. the forecasts

“Foods and non-alcoholic beverages” saw the highest increaseand the biggest influence on the index, with a 9.8% monthly inflation rate. Meats and meat-related productss, dairy and eggs were among the goods with the largest price hikes. . 

The “communications” — including telephone and internet bills —and hospitality sectors followed suit, with 7.7% and 7.5% monthly increases respectively.

The two sectors that rose the least in January were education (3.2%) and clothing (3.9%). 

Last November, Economy Minister Sergio Massa said he hoped for a slow but steady reduction of inflation, with a monthly rate below 4% by April. In its 2023 budget, the government forecast a 60% for the entirety of 2023. To reach that goal, monthly inflation would have to  average 4.7% until December. However price rises have not been that low since March 2022, according to the INDEC.

Inflation was higher than expected by the most of the private sector. The Central Bank’s Market Expectations Survey (REM), which averages forecasts from different consulting agencies and banks, predicted a 6.1% average inflation for February and 99.9% for the entire year. In a survey made by the broker SBS, private inflation forecasts ranged from 5.7% to 6.8% for the month. 

“March tends to be a month with higher inflation than the rest of the year,” said a report by business consulting firm Ecolatina. It pointed to the drought, increases in salaries and utilities, import restrictions and tensions over the exchange rate gap as factors that will  accelerate inflation during the year. 

Ecolatina predicted in its February report that 2023 inflation will be in the “100% zone” despite price agreements.

IMF criticism

The INDEC report comes one day after the International Monetary Fund (IMF) staff and the Argentine authorities reached a Staff-Level Agreement on the fourth review of the Extended Fund Facility (EFF) Arrangement. In the report, the IMF said that “inflation pressures” have “picked up in recent months”, and that Argentine authorities intend to keep policy interest rates positive in real terms to address it.

The IMF also said that its program has an “anchoring role” in the country’s economy, now with the added difficulty of a severe drought. The IMF also demanded a “stronger policy packet”, and reported that it reached agreements with the national government regarding its fiscal, monetary and financing policies.

The IMF EFF agreement has generated tensions within the government since it was reached in March 2022. Today, kirchnerite organization La Cámpora said in a press release that the deal is inflationary,criticizing the government and the IMF for what they consider to be part of an austerity package.