Argentina's Inflation Forecast: A Beacon of Hope for the Economy

Argentina's inflation estimate for the end of this year has been revised down to 146.4%, signaling an improving economic outlook. The central bank poll shows reduced monthly inflation rates for May and June but predicts a 3.8% economic shrinkage. Unemployment forecasts have edged up despite the government's austerity measures.

Argentina's inflation estimate for the end of this year came down to 146.4%, some 15 percentage points below the previous forecast, a central bank poll of analysts showed on Thursday, signaling an improving outlook for the embattled economy.

For May, forecasts from 23 consultancies and 13 financial institutions estimated monthly inflation down 2.3 percentage points to 5.2%, while June inflation was seen down 1.3 points from the prior forecast at 5.5%. Latin America's No. 3 economy should, meanwhile, shrink 3.8% in real terms this year, the poll predicted, a 0.3-point deterioration from the previous forecast.

Forecasts for unemployment edged up 0.4 percentage points to 7.4% for the first quarter of the year. Despite four straight months of slowing monthly price rises, annualized inflation is still hovering close to 300%, and the government of libertarian President Javier Milei has pushed a tough austerity campaign in a bid to combat the crisis.