Argentina's monthly inflation rate fell to 2.2% in January, the lowest since mid-2020, after libertarian President Javier Milei took office just over a year ago, introducing austerity measures that helped stabilize the struggling economy.

The rise in Argentina's consumer price index was slightly below analysts' forecasts, at 2.3%, and down from 2.7% in December, a victory for Milei, who is seeking to maintain the positive momentum of the economy amid negotiations for a new agreement with the International Monetary Fund.

Argentina, a major grain exporter and rising energy producer, has been battling triple-digit inflation in recent years.

This rate, in annual terms, was close to 300% at the beginning of last year, but has since declined, reaching 84.5% in January, according to data from the official statistics agency INDEC. Monthly inflation, which peaked at around 25%, has remained between 2% and 3% since October.

Reducing inflation is essential for Milei's government, which wants to remove capital controls that hurt business and investment. It wants inflation to stay below 2% to allow the controls to be lifted, although analysts remain cautious about when that might happen.

According to INDEC, the division with the highest increase in the month was Restaurants and hotels (5.3%), due to seasonal increases in hotel services. It is followed by the Housing, water, electricity, gas and other fuels division (4.0%), due to increases in Housing rent and related expenses; and Electricity, gas and other fuels.

Meanwhile, the two divisions that registered the smallest variations in January 2025 were Education (0.5%) and Clothing and Footwear (-0.7%).