Monthly inflation in Argentina unexpectedly cooled for the first time in six months, breaking a streak even as price pressures remained very high.
Consumer prices in rose 7.8% in May, less than analysts’ expectations of 8.7%. From a year ago, inflation accelerated to 114.2%, the highest annual rate since 1991 when Argentina’s economy was exiting a sharp bout of hyperinflation.
Utilities, tourism and healthcare led monthly price increases in May, according to government data published Wednesday.
Argentina’s central bank board is expected to hold its key benchmark rate Thursday at its weekly meeting because of the lower inflation print. The monetary authority has tightened policy aggressively this year in a bid to cool prices, raising the key rate from 75% to 97%.
Read More: Argentines Debate Ditching Peso for the Dollar to Tame Inflation
Annual inflation has surged into triple-digit territory as money printing, a record drought and persistent fears of an abrupt currency devaluation fuel more price hikes ahead of a wide open presidential election in October.
The drought exacerbated Argentina’s chronic shortage of dollars, translating to an estimated $20 billion drop in agriculture exports. Through April, agriculture exports are down 42% so far this year compared to the same period in 2022.
Economists surveyed by Argentina’s central bank see prices rising 149% annually by the end of this year.
--With assistance from Rafael Gayol.
(Updates with detail on central bank rate decision expectation in fourth paragraph)
