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Monthly inflation in economically troubled Argentina came in at 4.2 percent in May, the lowest in two-and-a-half years, mainly due to a drop in consumption, the INDEC statistics agency said Thursday.<\/p>\n For the first five months of 2024, the rate came in at 71.9 percent, and year-on-year at 276.4 percent — down from 289.4 percent\u00a0registered in April but still at record high levels.<\/p>\n The rate fell for the fifth successive month in May.<\/p>\n In December, when budget-slashing President Javier Milei took office, inflation leapt by 25.5 percent, provoked by his devaluation of the peso by more than 50 percent.<\/p>\n Self-declared “anarcho-capitalist” Milei has vowed to halt Argentina’s economic decline and reduce the budget deficit to zero.<\/p>\n He has slashed public spending, cut the cabinet in half, done away with 50,000 public jobs, suspended new public works contracts and ripped away fuel and transport subsidies.<\/p>\n In April, Milei hailed the South American country’s first quarterly budget surplus since 2008.<\/p>\n Economy Minister Luis Caputo on Thursday celebrated the May data as indicating a “deepening of the ongoing disinflation process.”<\/p>\n – ‘Significant fall in consumption’ –<\/p>\n Critics say Milei’s few wins have come at the cost of the poor and working classes, and were unlikely to last.<\/p>\n Economist Hernan Letcher of the CEPA economics think tank told AFP the inflation drop was explained, in large part, by a “significant fall in consumption.”<\/p>\n “We consultants expect that the process of reducing the rate of inflation will not continue in June,” he said.<\/p>\n “The market expectation survey shows that a level in the order of five percent will be maintained until the end of the year.”<\/p>\n Consumer consumption, manufacturing and construction have slumped under Milei’s peso devaluation and budget cuts, with a 5.3 percent contraction in economic activity in the first quarter.<\/p>\n The International Monetary Fund expects the Argentine economy to contract by 2.8 percent this year, after a 1.6-percent decline in 2023.<\/p>\n The government this week reported a 16-percent increase in real wages in the private sector in April and a recovery of purchasing power that is the “most significant since 2009.”<\/p>\n It is a relative figure, however, in a country where informal employment accounted for more than 45 percent of the work force even before the impact of Milei’s austerity measures started hitting home.<\/p>\n Poverty in the South American country now stands at 55.5 percent, according to the Pontifical Catholic University’s Social Debt Monitor.<\/p>\n