Argentina monthly inflation seen at five-year low in May

By Hernan Nessi

BUENOS AIRES (Reuters) -Argentina's headline inflation likely slowed in May to its lowest monthly rate in five years, a Reuters poll of analysts showed on Tuesday.

Consumer prices rose 2% last month, according to the average and median estimates of 24 local and foreign analysts, returning to an inflation level the country has not reached since the economy was paralyzed by pandemic lockdowns in the first half of 2020.

Inflation has fallen significantly since President Javier Milei took office in December 2023, coming close to 2% in January and February before hitting 3.7% and 2.8% in March and April respectively.

A May rate at or below 2%, if confirmed by the national statistics agency on Thursday, would be the best monthly rate of Milei's government.

"Although the inflation data for March and April showed a slight acceleration compared to the previous months, in May a new trend begins to become evident", said Julian Orue, economist at Fundacion Libertad y Progreso.

In mid-April, Milei's government eased Argentina's exchange rate regime, which, according to analysts, helped ensure a downward trend in inflation.

"The downward trend in inflation is holding steady, despite the normal bumps that come with an economic stabilization and normalization process," said Pablo Besmedrisnik, economist and director of VDC consultancy.

The analysts' projections for May inflation ranged between a minimum of 1.6% and a maximum of 2.5%.

Argentina's statistics agency INDEC will release official data regarding May inflation on Thursday afternoon (1900 GMT).

(Report by Hernan Nessi; Editing by Brendan O'Boyle and Lisa Shumaker)

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