Estimates for the second half of the year: Does the slowdown reach close to 2026 around 30%?

Argentina's inflation continued its downward trend in June, with the overall rate settling at 1.9%, matching the core inflation figure which excludes volatile components. This marks another month of moderation, continuing a three-month streak, though it has yet to break through the 2% monthly threshold that has been maintained since mid-2025. According to a report by Invecq Consulting, the core inflation, after removing the effect of meat prices, dropped further to 1.8%, indicating that the influence of this sector is beginning to wane. The meat category had previously driven much of the inflationary pressure, recording average monthly increases of 6.4% between November and March. However, in June, it only contributed a marginal 0.1% increase, helping to ease the overall inflation rate. The decline in meat-related price pressures reflects broader efforts to stabilize the economy, although challenges remain in achieving sustained deflation. Economists from Invecq Consulting caution that while progress is being made, breaking free from the inflationary inertia will take time. Since June 2025, the underlying inflation rate has hovered around 2%, but it has not yet stabilized significantly below that level. They warn that stabilization processes are non-linear, and inflation can take years to return to single-digit annual rates. Several factors could slow the pace of disinflation. A gradual recovery in consumer spending, improved wage growth, and an anticipated rise in the exchange rate to around $1,800 by year-end are among the potential headwinds. On the other hand, weak domestic demand and lower pressure from regulated prices continue to act as moderating forces. Looking ahead, Invecq projects that inflation will average approximately 1.8% per month during the second half of the year. If this trajectory holds, Argentina would end 2026 with an accumulated inflation rate close to 30%. While the deceleration process shows signs of progress, the consultancy notes that several more months of stability will be needed before the country can confidently move away from the 2% monthly benchmark that defines the current stabilization phase. The ongoing economic adjustments reflect a complex interplay of internal and external variables. As policymakers navigate these dynamics, the focus remains on maintaining momentum toward long-term price stability, even as short-term uncertainties persist. The path forward will depend on how effectively these challenges are managed and whether the current trends can be translated into lasting economic resilience.