August Inflation: Market Expects It to Fall Below 2%

August inflation is expected to show a significant slowdown compared to the 2.1% recorded in July, landing around 1.7%, according to initial market estimates. As previously reported by Ámbito, major private consulting firms had anticipated in recent weeks that the CPI would fall below 2%, primarily driven by reduced food pressure and the end of seasonal factors related to winter vacations. Now, the Central Bank's Market Expectations Survey (REM) has confirmed this trend, placing the estimate for the month at 1.7%.

The definitive figure will be published by INDEC on September 10. Meanwhile, private measurements have shown a range of projections between 1.4% and 1.9%. Fundación Libertad y Progreso calculated the lowest figure at 1.4%; EcoGo estimated 1.5%; C&T Economic Advisors, 1.6%; Analytica, 1.7%; and Equilibra, 1.9%. The consensus among various measurements is that August has left behind the spike from the previous month and resumed the downward trend that was interrupted in July.

One of the main factors behind the slowdown was the behavior of food and beverages, a category with a strong impact on the CPI. Fundación Libertad y Progreso estimated an increase of only 1.1% in this category, while other consulting firms also detected a moderation compared to previous months. At the same time, the effect of seasonal prices, which had pressured during winter vacations, particularly in tourism, hotels, and airfares, has weakened.

In Greater Buenos Aires, C&T Asociados calculated a retail inflation close to 1.6%, the lowest level since August of last year. The consulting firm explained that the slower pace of increase was mainly associated with the decline in the impact of seasonal components, although fruits and vegetables showed significant increases again. Housing maintained a pace close to 2.5%, and health advanced around 2%, indicating that the slowdown was not uniform across the different components of the basket.

The Market Expectations Survey conducted between August 27 and 31 brought the inflation estimate for August to 1.7%, one-tenth lower than in the previous survey. The calculation was based on responses from 35 consulting firms and research centers, along with 12 financial entities. However, for the coming months, analysts do not project a sharp drop in the CPI: they expect inflation of 1.6% in September, 1.7% in October, 1.6% in November, and 1.8% in December.

The scenario presented by the REM thus marks a new floor for inflation, but also a limit to the speed of disinflation. The market expects the index to remain below 2% monthly, although still far from inflation close to 1% or lower. In other words, August could be a positive figure for the government, but projections do not anticipate a marked deepening of the decline during the last quarter.

In fact, analysts who participated in the survey estimate that inflation will remain between 1.6% and 1.8% monthly until February, while for the entire year of 2026, they project a cumulative price increase close to 30%. For the next 12 months, the expectation is around 21%. The scenario shows a slowdown compared to previous levels, but also a resistance of inflation to break through certain levels.

The August figure will be particularly observed by the government as it would allow them to show a recovery of the disinflation path after the 2.1% of July. The discussion, however, is beginning to shift towards the coming months: with the CPI again below 2%, the challenge will be to determine whether the process can continue towards lower levels or if the 1.5%-1.8% monthly range consolidates as a new floor. In this sense, the market maintains a cautious outlook. Expectations for the last quarter do not show a pronounced decrease, and although the consensus points to inflation starting with the number 1, analysts still do not see conditions for an acceleration of disinflation.

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