June inflation was 1.6%, and the year-on-year rate plummeted to 39.4%.

The National Institute of Statistics and Censuses (INDEC) published this Monday the consumer price index (CPI) for the month of June, which showed a variation of 1.6%, a figure well below projections.

Far from being close to 2% as most consulting firms had anticipated, the figure confirms the sharp deceleration of inflation that the Argentine economy has experienced since the end of 2023 and consolidates a new success for Javier Milei's administration.

The data comes after the historic 1.5% recorded in May, the lowest in more than five years, and highlights the shift in economic direction. Core inflation, which excludes seasonal and regulated factors, stood at 1.7%, marking the lowest value since May 2020. If the distorting effect of the pandemic during those months is excluded, this is the lowest level since January 2018.

One of the most notable aspects of the report is the evolution of goods, whose monthly variation was just 0.8%, the lowest since the current statistical series began in January 2017.

Meanwhile, the food and non-alcoholic beverages category, which usually has a direct impact on the most vulnerable sectors, increased by only 0.6%, less than half the general index. In year-on-year terms, this category has accumulated 32.3%, which represents 7.1 percentage points below the general average.

Year-on-year inflation at the national level reached 39.4%, the lowest reading since January 2021. With this data, there have now been fourteen consecutive months of year-on-year inflation deceleration, an unprecedented phenomenon in the last decade. This data provides strong evidence that the economic plan based on fiscal balance, zero issuance, and deregulation is a total success.

Regarding the divisions with the highest increases in June, Education (3.7%) stood out, while the lowest increases were seen in clothing and footwear (0.5%) and food and non-alcoholic beverages (0.6%).

While some sectors expected a much higher CPI, the fact that inflation has been contained for the second consecutive month around 1.5%-1.6% demonstrates that the country is leaving behind years of price instability. Milei, who took office in December with a monthly inflation rate above 25%, is beginning to show results that few anticipated in such a short period.