Argentina records lowest monthly inflation in 4.5 years

Argentina recorded a monthly inflation rate of 2.2 percent in January, the lowest in 4.5 years, the INDEC national statistics agency said Thursday, in a boost for budget-slashing President Javier Milei.

Inflation, the perennial bugbear of South America's second-biggest economy, was down from 2.7 percent in December, it said, and January was the fourth straight month in which prices rose by less than 3 percent.

Year-on-year, January inflation came in at 84.5 percent, said the INDEC -- the first time in two years it was under 100 percent.

Self-declared "anarcho-capitalist" Milei came to power wielding a chainsaw as a symbol of his plan to restore fiscal discipline and curb runaway prices.

During his first month in office in December 2023, inflation hit a record 25.5 percent after he devaluated the beleaguered peso by 52 percent.

But by November 2024, it had fallen to its lowest level in over four years on the back of an austerity program that has entailed firing over 33,000 public sector workers, halving the number of government ministries and vetoing inflation-aligned pension increases.

Milei's measures, which plunged Argentina into recession, are blamed for tipping millions more people into poverty in the first half of 2024 and brought tens of thousands of people into the streets in protest.

Milei has swatted away criticism, insisting that what he presents as short-term pain will lead to long-term gains for the economy.