Argentina's monthly inflation ticks up as Milei faces backlash over an
outdated index
[February 11, 2026] By
ISABEL DEBRE
BUENOS AIRES, Argentina (AP) — Inflation in crisis-prone Argentina
accelerated more than expected and for a fifth straight month in
January, the country’s statistics agency said Tuesday, a closely watched
report whose outdated methodology in recent days stoked political
turmoil and created a headache for libertarian President Javier Milei.
Consumer prices rose 2.9% last month compared with December, said the
statistics agency known by its Spanish acronym INDEC, largely owing to
increases in the prices of food, restaurants, hotels and utility bills.
Economists say that the formula that INDEC used to calculate the
inflation rate still underestimates real price rises in a country
reeling from Milei's harsh austerity program that his close ideological
ally, U.S. President Donald Trump, has backed with $20 billion and
championed as a model for downsizing federal bureaucracy.
After months of mounting pressure, Milei's government said it would redo
the index used in the official inflation reports, which is currently
based on consumption habits from 2004 and reads like a time capsule:
Cigarettes, newspapers, DVDs and landline phones are considered key to
the “basket” of goods and services consumed by the population.
The old formula not only fails to reflect how much Argentine households
spend on present-day staples like Netflix subscriptions and iPhones,
experts say, but also underrepresents the costs of public services like
health care and electricity that have skyrocketed as Milei slashes
subsidies. Rent has also shot up as Milei unwinds price controls.
“It is very likely that the regulated public service prices in Argentina
will see a strong increase this year, and the new methodology for
measuring inflation will give those increases a lot more weight," said
Camilo Tiscornia, director of Buenos Aires consultancy C&T Asesores
Economicos and a former central bank official. “The government is
engaged in a fight against inflation, so this index doesn't help.”
An abrupt about-face reawakens economic trauma
Milei's economic team was expected to apply the new index for the first
time in Tuesday's report.
But last week, officials backtracked and announced that INDEC would
carry on using the obsolete formula.
The move revived memories of blatant tampering with inflation statistics
by past populist governments, rattling investor confidence and public
trust. The country’s widely respected national statistics chief resigned
and Argentina’s benchmark S&P Merval stock index tumbled several
percentage points last week.
“With this decision, a Pandora’s box was reopened,” said Sergio
Berensztein, who runs a political consultancy in Buenos Aires. “I know
the officials of the economic team, they are in no way going to repeat
the mistakes of the past. But the public, the market, investors,
society, have every right not to trust.”
Elsewhere in the world, perhaps such a technical-sounding government
decision would fall to the domain of data wonks and financial
consultants. But it was the talk of the town in Argentina, a nation of
amateur economists weaned on years of uncontrolled inflation and violent
exchange rate volatility.
“It generated a lot of questions. These controversies are never good for
public opinion," said Ana Stupi, a 58-year-old lawyer heading home from
work in Buenos Aires on Tuesday. “I hope that everything can be
transparent so that this economic stabilization continues.”
Under former President Cristina Fernández de Kirchner, who succeeded her
husband Néstor Kirchner in November 2007, Argentina was accused of
doctoring data to make inflation seem only a fraction as high as it
really was.
Between 2007 and 2013, the government fired technical staff at INDEC and
packed the agency with political allies to conceal a mounting crisis.
Fernández's government even deployed fines and threats of prosecution to
muzzle independent inflation forecasts.
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A customer pays for fruit at a greengrocer's stall in Buenos Aires,
Argentina, Tuesday, Feb. 10, 2026. (AP Photo/Rodrigo Abd)
 “INDEC was heavily manipulated for
many years ... I never trusted any of the data," said 65-year-old
pensioner Liliana Pastor. “We know that everything like that gets
adjusted according to political needs.”
Experts say the government decision did far more damage than the
release of a higher inflation rate would have.
“It puts a short-term goal ahead of a long-term strategy,” said
Marcelo J. García, Americas director at geopolitical risk firm
Horizon Engage. "It gives the opposition an opening to criticize
more substantially the credibility of the numbers that INDEC is
producing and therefore question the credibility of the government.”
Argentina's inflation remains stubborn
The controversy further soured the national mood as Argentines
increasingly lament that they’re absorbing all of the pain of
Milei’s program and few of its benefits.
The main benefit so far — and the main cause of Milei’s glow of
public approval — has been the government’s rapid reduction of
Argentina’s notoriously high inflation, from over 211% annually in
late 2023, when the radical libertarian leader took office, to 31%
last year, according to INDEC.
Few dispute the importance of his victory. But many question its
sustainability.
To bring down inflation, Milei has relied on deep spending cuts, an
influx of cheap Chinese imports and a controversial exchange rate
scheme that kept the Argentine peso stable against the dollar,
leading some economists to consider it overvalued and making
shopping sprees abroad inordinately cheap for well-heeled
Argentines.
But after hitting a low of 1.5% last year, monthly inflation has
more recently ticked up, reflecting lingering challenges as Milei
struggles to cement his primary political achievement. Concern is
also growing over how salaries have lagged behind inflation,
shriveling in value and squeezing household budgets.
“At the end of the day, prices are about what you can buy with your
salary. Here and now, it’s obvious that you can buy less than you
did a couple years ago," said Facundo Diaz, a 33-year-old graphic
designer.
In the coming months, further subsidy cuts risk fueling higher
inflation, as does a looser foreign exchange rate policy that allows
the peso to move more freely in the currency market.
“Milei seems sort of puzzled by the fact that his theoretical
beliefs led him to expect inflation to go down sharply, but he’s
facing a different reality that calls that into question,” said
Ignacio Labaqui, a Buenos Aires-based senior analyst at risk
consultancy Medley Global Advisors. “Most countries between six to
eight years to go from the levels of inflation that Argentina had to
a single-digit.”
Bad inflation news brings relief
Although Tuesday’s higher-than-expected rate of 2.9% deals a blow to
Milei’s war against Argentina's chronic price pressures, some
experts expressed relief.
In outpacing even most private-sector calculations, the INDEC
inflation figure published Tuesday dispelled concerns — at least for
now — that the government was cooking the books in any way
comparable to his predecessors.
“Fortunately, January’s inflation was high enough that nobody can
really say that the index was manipulated,” Berensztein said. “If
the figure had been 1.2% or 2%, it would not have been credible.”
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