The Argentine president received an annual CPI of 211.4% in 2023 and would close 2027 with just 10%. Analysts and consultants agree on a downward trend in the coming years.
Market analysts expressed their optimism for Javier Milei's presidency and adjusted inflation projections in Argentina downwards, placing it at 10% per year for the year 2027, that is, once the mandate of the libertarian who had promised to eradicate it comes to an end. It would be the best result recorded since 2006.
The data comes from the most recent Market Expectations Survey (REM), conducted between December 23 and 27, 2024 and published by the Argentine Central Bank. As every month, it included forecasts from 42 participants, including banks such as Santander, ICBC and BBVA, prominent entities (JP Morgan), research centers and various consulting firms specialized in economics.
This time, the survey, which is followed with interest every month on the agenda on the other side of the Andes, had a special impact because it included for the first time an analysis up to December 2027, when Milei will complete his presidential term (the first, judging by his public intentions to seek re-election).
For December 2024, data that the Government will publish on January 14, the REM expects a general Consumer Price Index (CPI) of 2.7%. As accumulated inflation in the 12 months of 2024, it estimated 117.8%, one percentage point below what the previous survey reported.
This confirms a downward trend in the main scourge for Argentine pockets. It is worth noting that in 2023, the last year of the presidency of Alberto Fernández (Frente de Todos), the annual CPI had climbed to 211.4% and 25.5% in December alone, the highest figure since the end of 1990 when it had reached 1,344% in the midst of a process of hyperinflation.
Looking ahead, the Market Expectations Survey predicts a general level CPI (median) for January 2025 of 2.5%, another 2.3% for February and the same 2.3% for March. For April, it is estimated at 2%. For the first time since May 2020, when pandemic restrictions froze economic activity, monthly inflation would break through 2 points and reach 1.9% in May, reinforcing a downward trend in the following months.
For the 12 months of 2025, consultants and financial institutions expect a general CPI of 25.9%, 2.2 percentage points below the previous projection. This would thus become the lowest annual inflation rate in Argentina since 2017, during the administration of Mauricio Macri (Cambiemos), when it was 24.8%.
Returning to the REM data, in 2026 the annual CPI figure points to 15.3% and for 2027, 10%, both measurements also modified downwards due to the favourable climate.
The recent lows for annual inflation in the neighboring country date back to 14.9% in 2009 (private measurement, since the National Institute of Statistics and Census was intervened due to manipulated figures when Cristina Fernández de Kirchner was president) and 9.8% in 2006. In short, Milei would reach the end of her mandate with the lowest increase in the cost of living in 21 years.
What will happen to the exchange rate, unemployment and GDP in Argentina?
As with the inflation slowdown, the REM results showed an average dollar of 1,042 Argentine pesos for January, that is, a monthly increase of 2.1% of the exchange rate, within the range of the 2% crawling peg (managed devaluation) established by the Central Bank.
For next month, the market expects an average official dollar of ARS 1,057.60. Meanwhile, for March, another moderate increase is expected to leave it at ARS 1,070.70; for April, ARS 1,084.70; in May it would be ARS 1,097.50; and in June it would rise to ARS 1,111.
Milei anticipated that the fluctuation scheme will be reduced to 1% per month, as long as inflation continues to decline. Considering that, for December 2025, the market projects an official dollar close to ARS 1,205, the evolution provides an average variation of 1.4% per month for the entire year.
Regarding the Gross Domestic Product (GDP), which measures the value of final goods and services produced during a year, the REM anticipates an upward path for the next three years: economic activity in Argentina will grow by 4.5% in 2025, another 3.7% in 2026 and 3% in 2027.
Finally, the unemployment rate expected for the fourth quarter of 2024 is 7.2% of the economically active population, that is, 0.8 percentage points less compared to the previous survey. The same rate would drop to 7% in December 2025 and would remain at the same level at the end of 2026.
