Inflation falls to over one-year low in June

Latest reading: Inflation eased to 4.6% in June from May’s 5.1%, marking the lowest inflation rate since May 2024 and surprising markets on the downside. Moreover, this was the third consecutive decline, confirming a downward trend toward the midpoint of the Central Bank’s 3.0–6.0% inflation target. Looking at the details of the release, June’s downturn was broad-based, with softer price growth in food, transportation plus housing and utilities. As a result, the trend pointed down slightly, with annual average inflation coming in at 5.2% in June (May: 5.3%). Lastly, consumer prices dropped 0.09% in June over the previous month, swinging from the 0.11% rise logged in May. June's result marked the weakest reading since December 2023.

Panelist insight: Commenting on the outlook, Lucila Barbeito and Diego W. Pereira, analysts at JPMorgan, stated: “Regarding forecasts, the deceleration in headline inflation proved faster than expected on tradable CPI, prompting us to adjust our headline year-end projection further downward […]. Our forecast entertains an acceleration in monthly inflation in 2H25 to 0.3% monthly average as we anticipate structurally sticky non-tradable prices. On this regard, it is worth noting that the government unveiled today the next 2 year wage guidelines, proposing real salary increases between 2-4%, conditional on income level.”

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