As inflation in Argentina cools to single digits, residents remain skeptical

Argentines say they are yet to feel the benefits of slowing inflation, as a five-month streak of falling prices ended when official data on Friday showed inflation in June was higher than in May.

Since President Javier Milei took office late last year, inflation has slowed dramatically in Argentina, decelerating from 25.5% in December to 4.2% in May. June's figure was 4.6%.

The steep drop has been attributed to a series of cost-cutting and austerity measures that have dampened consumer demand, as well as measures to reduce money printing.

For many Argentines, the slowdown has not been enough to ease the pain of high utility, transportation and food prices in a country where the minimum monthly wage of 234,315 pesos ($260) has failed to keep up with annual inflation of nearly 300%.

"I don't think (inflation) goes hand in hand with wage increases and taxes," said Gustavo Garcia, a 47-year-old hairdresser who was looking for bargains in the Buenos Aires central market.

"Daily inflation is much more than 4% or 5%," Garcia said, expressing skepticism about how the official figures were calculated.

Milei, a free-market economist, ended the previous Peronist government's price freeze on numerous public services and says tough fiscal medicine is needed to revive the economy. The minimum bus fare in Buenos Aires has increased by more than 400% since Milei took office.

In the market, Isidoro Recalde, 67, said the tariff increases were necessary and supported the government's plan.

"What we were paying before was insignificant," Recalde said. "Let's be realistic. On a daily basis things are complicated, but we have to keep going."

Argentina's government has touted its success in taming inflation and boosting state finances thanks to Milei's spending cuts.

"Reducing inflation means protecting those who have the least," the economy minister told reporters earlier this week. "(Inflation) is the worst tax for the poor," Caputo said.

But inflation remains one of the highest in the world, while a recession continues to hit consumers hard and poverty is approaching 60%. People are being hit hard, with large job losses in sectors such as construction.

"Every day there are new prices, it's not like (inflation) is stopping," said Emilia, a 65-year-old resident who was also shopping and did not want to reveal her last name. "It's a lie that prices are going down," she said.

Collaboration: Grupo Auge | Reuters (International).