Argentina's inflation reached 104.3% in March

Inflation’s rise, despite government measures to bring it under control, is impacting the political debate ahead of the presidential election

Firms should continue to expect consumer behavior to be molded by the inflationary environment. Consumers will continue to buy essentials in bulk, when possible, in anticipation of continuing price hikes, while discretionary spending is likely to become increasingly limited, particularly among low-income segments. Firms should also empower their government affairs teams to work closely with Finance Minister Sergio Massa and President Alberto Fernandez’s administration to mitigate the impact of continued price controls and other disruptive policies on the business. Regulatory risk will be especially high in the months leading up to October. Finally, firms should expect that even with a change in government in December, macroeconomic imbalances will persist throughout 2024, dampening growth as the new administration struggles to build consensus to implement much needed structural reforms.


  • In March, inflation rose by 4.4% MOM, reaching 104.3% in annual terms. This was the second month of triple-digit inflation. March’s inflation rate was the highest since 1991. Unlike most other large LATAM markets, Argentina is expected to post higher inflation in 2023 than in 2022, averaging 105.8%.
  • The March hike was driven by a 29.1% MOM increase in education prices (education costs are adjusted at the beginning of the year), followed by rising inflation in clothes and shoes (9.4% MOM), food and beverages (9.3% MOM), restaurants and hotels (7.9% MOM), utilities (6.5% MOM), and services (6.3% MOM).
  • Rising food and energy prices in the wake of the invasion of Ukraine worsened Argentina’s inflation problem, but prices were already rising prior to 2022. The central bank’s heightened pace of money printing and loose monetary policy during the pandemic along with the currency’s gradual depreciation were already putting pressure on prices.

Our View

While we expect Finance Minister Massa to continue to rely on ad hoc measures such as price controls and an increasingly complex FX regime to keep Argentina’s bubbling crisis from boiling over, he is unlikely to succeed in reducing inflation. While the pace of inflation could begin to slow in Q2, it is likely to remain at or near-triple digits throughout H1, with slight easing in H2. This level of inflation, combined with a poverty rate of over 40%, is already impacting the political debate in the lead-up to Argentina’s October presidential election. Libertarian, outsider candidate Javier Milei has gained traction in recent months due to his hardline stance on inflation and public spending, pushing potential contender Patricia Bullrich further right. While we expect a win from the more moderate opposition in the elections under the current context, worsening economic conditions could further boost Milei’s popularity.

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