May inflation in CABA fell to 1.6%, which is the lowest figure in five years.

Thanks to the successful economic plan of the Government of Javier Milei, inflation in the City of Buenos Aires fell below 2% per month, reaching just 1.6% in May, the lowest figure in 5 years.

This sharp deceleration was mainly explained by the drop in prices of vegetables and legumes (-4.9%), categories with significant weight in the basic basket, as well as by the reduction in residential gas rates (-2.3%), household appliances (-3.3%), and tourist tickets (-6.9%). Meanwhile, fruits (+0.7%) and the clothing and footwear category (+0.9%) showed slight variations.

With this figure, the CABA Price Index has accumulated an increase of 12.9% so far this year and a year-on-year increase of 48.3%, according to the City’s Institute of Statistics and Census.

It is important to note that these figures open the possibility that the national index, which INDEC will publish this Thursday, could also show inflation below 2%.

The director of the Buenos Aires statistical agency, José M. Donati, highlighted that to find such a low monthly figure, one must go back to July 2020, when inflation was also 1.6%. In June and May of that year, it was 1.4% and 1%, respectively.

The report also notes that the prices of Goods increased by just 0.8%, while Services rose by 2.0%. Among the latter, the sharp monthly increase of 10.9% in financial services stood out.

The categories

Within the Goods category, increases were observed in food, especially in meats, baked goods, and dairy products, and to a lesser extent, in medicines. In contrast, there were decreases in the prices of vegetables, fuels and lubricants for domestic use, as well as in large household appliances and home devices.

Regarding Services, the main increases were in financial services (+10.9%), rents (+3%), gastronomy (restaurants, bars, and food outlets), prepaid medical care (+2.9%), and housing-related expenses. However, there were declines in the prices of airline tickets (-12.5%) and in hotel accommodation rates and tourist packages (-6.9%).

This way, in the first five months of the year, Goods accumulated an increase of 9.7%, while Services rose by 14.9%. Year-on-year, Goods increased by 31.3% and Services by 61.0%.

The report also notes that seasonal prices showed an average decrease of 3.6%, mainly attributed to the drop in airline tickets, accommodations, tourist packages, and vegetables. Meanwhile, regulated prices increased by 1.7%.