The National Institute of Statistics and Census of Argentina (INDEC) revealed on Tuesday that it had documented an inflation rate of 2.7 percent in the country for October.

October marked another month where Argentina experienced a significant reduction in its inflation rate as a result of the “shock therapy” policies implemented by President Javier Milei upon taking office in December. The South American nation has continuously reduced inflation from 25.5 percent at the start of the year to 2.7 percent. During September, inflation was measured at 3.5 percent.

In its latest detailed monthly report, INDEC explained that October’s 2.7 percent result represents the average inflation rate obtained from several categories. In October, inflation in food was measured at 1.2 percent, making it the category with the lowest inflation rate in the entire month and the category’s lowest result since June 2020 — at a time when the previous administration of socialist President Alberto Fernández reportedly implemented steep price controls.

The categories with the highest inflation rate in October, INDEC detailed, were housing, water, electricity, gas, and other fuels at 5.4 percent, followed by clothing and footwear at 4.4 percent. Core inflation, a measurement that excludes seasonal and regulated prices, was registered at 2.9 percent, down from 3.3 percent in September.

President Javier Milei celebrated the results across social media. On Instagram, Milei published a photo with October’s inflation rate results that he accompanied with the text, “Let’s go Toto [Argentine Economy Minister Luis Caputo] damn it!!!”

On a Tuesday evening Twitter post, Milei explained that presently, monetary inflation is measured at an annual rate of 2.4 percent — pointing out that if the current trends are confirmed for two additional months, Argentina’s monthly devaluation rate could lower to one percent.

“If we subtract the induced inflation (pre-fixed devaluation + international inflation), monetary inflation is traveling at 0.2 percent per month, that is, 2.4 percent per year. If this inflation is confirmed for two more months, the monthly devaluation will drop to 1 percent,” Milei explained before saying “VLLC,” the initials of his widely-famous catchphrase “Long live liberty, damn it!” 

 

Economy Minister Luis Caputo celebrated October’s results in remarks given to Argentina’s Radio Mitre, describing it as great data and particularly positive because “this is what we have come to do.”

“We have come to lower inflation and it was a very difficult task. Today we are at 2.7 percent, which is a level very close to the international inflation, in a way it dissipates the exchange rate,” Caputo explained. “The idea is, as long as inflation is maintained, to lower the crawling level of this monthly adjustment to 1 percent and to take a new step down in the inflation level.”

“We are in a moment in which inflation is strongly decreasing, recomposing relative prices, fares are no longer subsidized as before, food, fuel, exchange rate,” he continued. “All this was inflation hidden under the carpet. It is very important to have lowered inflation from the levels of December to the current levels.”

Asked about the lifting of Argentina’s longlasting currency control measures — implemented by previous administrations — Caputo explained that it is not a matter of a date, but that the Argentine government placed certain conditions so that rescinding the controls are the “least traumatic possible,” for the country.

“We do not want to generate expectations, clearly conditions are converging towards where we want, it is a matter of time,” Milei said. “I would tell you that today investments technically in the real economy is something that takes much more time, the president has captured the world’s attention. We have to get out of the controls when it does not generate any problem for the Argentines.”

At the time Milei took office in December 2023, the disastrous policies of the previous socialist administration of Alberto Fernández left Argentina on the verge of a hyperinflation spiral and a complete economic collapse.

On Tuesday, during Caputo’s participation at the 2024 Annual Conference of the Latin American Economic Research Foundation, the Economy Minister stressed that the current Argentine government received “the worst inheritance in history” and that “Argentina had no credibility decades ago.”

As a result, Caputo said, the government needed to “show results from day one,” further stressing that “the more time goes by, the more we leave behind the negative effects of the horrible monetary policy of the previous government and the more our monetary policy prevails.”

Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.