Argentina’s inflation slows to 8-month low in a boost for President Milei

BUENOS AIRES, Argentina (AP) — Argentina’s inflation slowed for the second straight month in May, economic data released Thursday showed, providing some welcome news for President Javier Milei after almost a year of stubbornly persistent price increases that threatened to undermine the libertarian leader’s signature achievement.

Consumer prices rose 2.1% last month compared with April, the government statistics agency INDEC reported — a rate hailed by Economy Minister Luis Caputo as the lowest monthly level in eight months.

But annual inflation rose marginally to 33.2% this May because monthly inflation in May 2025 hit a seven-year low of 1.5%. Since then, prices have climbed and stayed high, squeezing households and fueling public frustration with Milei’s government as it grapples with a series of corruption scandals and struggles to respond to a slump in economic activity across the labor-intensive sectors of retail and manufacturing.

Last month, communications networks saw the biggest price increases with 3.4% on higher phone and internet bills, followed by education costs. Food prices accelerated by 2.5%.

Milei praised Minister Caputo, nicknamed Toto, on social media, posting the INDEC report with the comment, “Let’s goooooo Toto!”

Milei and Caputo also celebrated the news that S&P Global, one of the major credit ratings agencies, had upgraded Argentina’s sovereign credit rating late Wednesday to a stable B- from the CCC category, which is considered most at risk of defaulting, citing the government’s success in meeting debt repayments.

Although the upgrade leaves Argentina several notches below investment status, the vote of confidence advances Milei’s goal of bringing the crisis-prone economy back to global capital markets six years after Argentina defaulted on its foreign debt for the ninth time.

Milei came to office in late 2023 vowing to eliminate Argentina’s sky-high price increases and reverse its chronic fiscal deficits.

More than two years later, his sweeping deregulation and austerity measures have produced a rare budget surplus, charmed investors and slowed inflation — the annual rate, now at 33%, topped 200% when he took power.

But the inflation that makes the cost of living here in Buenos Aires comparable to that in European capitals outpaces real wages. Unemployment has ticked up as thousands of workers are laid off from national industries that can’t keep up with a flood of cheap imports.

Corruption scandals of the kind Milei vowed to eradicate upon taking office have struck a nerve against the backdrop of his efforts to defund education, health care and social assistance.

Most recently, Milei’s close aide and cabinet chief, Manuel Adorni, came under investigation for alleged illicit enrichment over lavish travel — including an all-cash trip to Aruba — and real estate purchases despite his meager public salary. On Wednesday, he admitted to hiding $500,000 in undeclared savings and cryptocurrency investments.

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