Argentina Inflation Seen Falling, But Oil Shock Puts Milei On Guard

Argentina’s anti-inflation drive is still working, but not as cleanly as Javier Milei needs. Economists now see consumer prices ending 2026 up 30.0%, a sharp drop from last year’s 44.5% yet higher than the 25.3% they expected in January, a reminder that falling inflation does not always mean fast relief for households.

The latest poll, which surveyed 22 economists from April 6 to 10, marked a clear shift in expectations after the oil shock tied to the U.S.-Israeli war with Iran. Even with that setback, the 30.0% forecast would still be Argentina’s lowest annual inflation rate in nine years. That is a dramatic change for an economy that was running at nearly 300% inflation in early 2024, when Milei began dismantling the previous model of heavy spending, currency controls and repeated devaluations.

The longer view is still improving, but less optimistically than before. Economists now expect inflation to reach 21.0% in 2027, worse than the 15.6% they had projected earlier. For consumers, that means the pace of disinflation may slow just as wages, rents, food prices and transport costs are still recalibrating after years of volatility. Argentina has made real progress from the 25.5% monthly inflation shock recorded in December 2023, but the latest numbers show that lower inflation is not yet the same thing as broad price stability.

The central bank’s own monthly survey offered a similar picture. The April 8 REM, based on responses from 46 participants collected between March 27 and 31, estimated March inflation at 3.0% month on month and put 2026 real GDP growth at 3.3%. That combination, slower price growth and positive output, suggests Milei’s government still has room to claim success. But it also shows how narrow the margin remains if imported energy costs or global shocks turn higher.

A recent Peterson Institute analysis added another layer of caution. It said Milei’s latest monetary scheme, introduced on January 2, is designed to keep inflation falling, rebuild reserves and support growth, but remains vulnerable because it depends on financial support and market confidence. The report also noted that the administration has eliminated a budget deficit of about 5% of GDP and trimmed the peso’s crawling peg from a 2% monthly depreciation to 1% a month last February.

That is the stress test now facing Argentina: inflation is coming down, but an oil shock, a fragile currency and lingering cost pressures could keep ordinary Argentines from feeling the full benefit as quickly as Milei promised.