Economic figures released Thursday revealed that Argentina experienced its second consecutive month of declining inflation in May, offering positive developments for President Javier Milei following nearly a year of persistent rising prices that posed challenges to the libertarian leader’s key policy accomplishments.
The government statistics agency INDEC announced that consumer prices increased by 2.1% in May when compared to April — a figure that Economy Minister Luis Caputo described as the smallest monthly increase seen in eight months.
However, yearly inflation climbed slightly to 33.2% this May due to the fact that monthly inflation in May 2025 reached a seven-year minimum of 1.5%. Following that period, costs have risen and remained elevated, creating financial pressure on families and increasing public dissatisfaction with Milei’s administration as it deals with multiple corruption scandals and attempts to address declining economic performance in retail and manufacturing sectors that rely heavily on workers.
During the previous month, communications services experienced the largest cost jumps at 3.4% due to increased telephone and internet charges, with educational expenses following close behind. Grocery costs rose by 2.5%.
President Milei expressed support for Minister Caputo, who goes by the nickname Toto, through social media by sharing the INDEC data along with the message, “Let’s goooooo Toto!”
Both Milei and Caputo also welcomed news that S&P Global, a prominent credit rating company, had improved Argentina’s sovereign credit rating late Wednesday to a stable B- from the CCC classification, which represents the highest default risk, recognizing the government’s ability to meet its debt obligations.
While this improvement still places Argentina well below investment-grade status, the positive assessment supports Milei’s objective of returning the financially troubled economy to international capital markets six years following Argentina’s ninth foreign debt default.
When Milei assumed office in late 2023, he promised to end Argentina’s extremely high price increases and address its ongoing budget shortfalls.
After more than two years, his extensive deregulation and spending reduction policies have created an unusual budget surplus, attracted investors, and reduced inflation — the yearly rate, currently at 33%, exceeded 200% when he began his presidency.
However, the inflation that makes living costs in Buenos Aires similar to those in European capitals continues to outstrip actual wages. Joblessness has increased as thousands of employees lose their positions from domestic industries unable to compete with an influx of inexpensive foreign goods.
Corruption scandals that Milei promised to eliminate when he took office have particularly upset the public given his simultaneous efforts to reduce funding for education, healthcare, and social programs.
Most recently, Milei’s trusted advisor and cabinet chief, Manuel Adorni, became the subject of an investigation for suspected illegal wealth accumulation through expensive travel — including a cash-only trip to Aruba — and property acquisitions despite his modest government income. On Wednesday, he acknowledged concealing $500,000 in unreported savings and cryptocurrency holdings.
