BUENOS AIRES – In a refreshing turn for Argentina’s economy, inflation has decelerated for the second consecutive month as reported in May, offering a glimmer of hope for President Javier Milei. The economic data disclosed on Thursday highlights this positive shift, which comes as a relief after a lengthy period of persistent price hikes that had threatened to overshadow the libertarian president’s notable achievements.
The National Institute of Statistics and Censuses (INDEC) revealed that consumer prices rose by 2.1% in May compared to the previous month of April. This increase was celebrated by Economy Minister Luis Caputo, who lauded it as the most modest monthly inflation rate in the past eight months.
However, on an annual basis, inflation edged up slightly to 33.2% this May. This uptick partly reflects the notably low 1.5% inflation rate recorded in May 2025, marking a seven-year low at the time. Since then, prices have steadily increased, placing a financial strain on households and fueling public dissatisfaction with Milei’s administration. The government has been navigating through corruption allegations and struggling to invigorate the economy, especially in the labor-intensive sectors like retail and manufacturing.
Among the various sectors, communications saw the steepest price increase, with phone and internet bills climbing by 3.4%. Education costs followed closely, while food prices rose by 2.5%.
President Milei took to social media to commend Minister Caputo, affectionately known as Toto, sharing the INDEC report with an enthusiastic message, “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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