Updated 5:45 p.m.

Inflation in Argentina ticked upward for the second consecutive month in October, registering at 2.2%, according to data released Thursday by the national statistics agency, INDEC.

The latest figure follows a reading of 1.9% in September, marking the first time in three months that the country’s monthly inflation rate has climbed above the 2% threshold. It also represents the highest monthly increase recorded since April, when inflation reached 2.6%. Despite the broader upward movement in headline figures, the report offered a measure of relief and a notable bright spot for President Javier Milei’s administration: core inflation dropped to 1.5%, down from 1.7% the previous month.

The latest core inflation reading highlights a rare milestone for the current administration. Core inflation has dipped to this level only once before during Milei’s tenure—in July 2025, some 15 months ago. Historical comparisons show that the last time core inflation was lower than the October 2026 figure was way back in November 2017, when it stood at 1.3%.

On an annualized basis, prices rose 33.1% compared to the same period last year, while cumulative inflation for the first ten months of 2026 reached 26.3%.

Headline Inflation vs. Core Inflation

The divergence between the headline inflation figure and the core inflation measure highlights structural dynamics within the broader economy. Core inflation strips out products and services that experience significant seasonal price fluctuations, as well as items whose prices are directly regulated by the government.

In October, these very excluded categories recorded the sharpest increases, driving the headline number higher. Seasonal prices jumped 5.5%, fueled largely by substantial upward pressure on fresh produce, specifically vegetables, tubers, and legumes.

Concurrently, regulated prices advanced by 2.9%, primarily reflecting upward adjustments in the gas and motor vehicle fuel categories.

Analysts at brokerage firm Puente pointed to policy adjustments as a key driver behind the regulated-price subindex. "The modification of the Cold Zone Regime—a system of subsidized natural gas tariffs for certain colder regions of Argentina—may have had an impact on the regulated-price subindex," analysts at Puente noted in a report.

This impact was clearly visible in the sectoral breakdown of the INDEC report. The largest monthly increase across all tracked categories was recorded in housing, water, electricity, gas, and other fuels, which surged by 4.2%. Regional variations within this category were wide, ranging from a decline of 2.2% in some areas to an increase of 11.1% in others.

Economy Minister Luis Caputo echoed a similar assessment in an analysis shared on social media platform X. "This month’s figure was affected by changes to the Cold Zone Regime, which influenced the variation recorded in the housing, water, electricity, gas, and other fuels category," Caputo stated.

Following housing and utilities, the second-largest monthly price increase was registered in the recreation and culture sector, which rose by 3.3%. At the opposite end of the spectrum, the categories experiencing the most subdued price growth nationwide were alcoholic beverages and tobacco, which inched up by just 0.8%, and education, which rose by 1.3%.

Market Reactions and Economic Outlook

Despite the encouraging contraction in core inflation, the overall October report fell short of market expectations. Financial analysts and economists had generally anticipated headline inflation to hover closer to 1.8%.

"We will have to see whether headline inflation converges with core inflation once these temporary factors have passed, although the impact of the Cold Zone Regime may also be felt in November," Puente analysts cautioned.

Guido Zack, Director of Economics at the Fundar think tank, offered a measured view of the data in comments to the Herald. "Within this unfavorable context, the only encouraging sign is that core inflation has declined," Zack said.

However, Zack cautioned against reading too much permanence into the lower core figure, noting that "one might think that part of this upward effect is likely to reverse in November." He emphasized that both headline and core inflation "are showing greater volatility than usual," meaning the 1.5% core reading should not be viewed as "a new ceiling for core inflation."

Zack concluded by pointing to the persistent challenge facing economic policymakers in Buenos Aires. "The reality remains the same: the government, and Argentina as a whole, are struggling to definitively push monthly inflation below the 2% threshold."