Argentina appears to have reached an inflection point in its long struggle against rising prices. Private consulting firms estimate that April’s month-on-month inflation slowed to between 2.4 and 2.6 per cent, marking the first decline in monthly price growth since May 2025. The official figures, due from the national statistics institute INDEC on May 14, would offer President Javier Milei’s administration a rare piece of good news after monthly inflation accelerated without pause from a pandemic-era low of 1.5 per cent in May last year to 3.4 per cent in March 2026.

Economy Minister Luis Caputo has attributed the prospective slowdown to the government’s elimination of the fiscal deficit and a halt to central bank money printing, arguing that demand for pesos is gradually recovering. Yet the rate remains well above the 2 per cent threshold that the government had hoped to breach by mid-year—a barrier it last crossed seven months ago, in August 2025. The central bank’s latest monetary report underscored the mixed picture: a 3 per cent real contraction in the monetary base in April, extending an eight-month streak, but gross reserves topping US$46 billion for the first time on the back of US$2.77 billion in forex purchases during the month.

The improvement in reserves has not yet translated into a credit revival; private-sector lending in pesos fell 0.1 per cent in real terms in April, and consumer loans only nudged higher after five months of decline, with banks still wary of household arrears. Early May data offer further encouragement—food prices were flat in the first week, after three weeks of increases in April—but analysts in Buenos Aires caution that this may be a pause rather than a definitive break in the inflationary trend. Viewed from Bogotá, the narrative is starkly different.

Colombia’s annual inflation hit 5.68 per cent in April, the highest reading in 19 months and above both the March figure of 5.56 per cent and market expectations. The monthly increase of 0.78 per cent was driven by food and non-alcoholic beverages, which rose 1.51 per cent, along with housing and transport costs. The data from the national statistics agency DANE confirmed that the main upward pressure came from restaurants and hotels, health, education, and alcohol—all posting annual increases above 6 per cent—while transport and communications stayed below the national average.

The acceleration has put the Banco de la República in a difficult position: inflation has overshot its target range for months, and analysts surveyed by the central bank now expect consumer prices to end 2026 at 6.44 per cent, well above the 3 per cent long-run goal. The divergence between the two economies reflects distinct policy choices. Argentina’s hard-line fiscal squeeze and currency stabilisation are beginning to yield marginal results, though the cost in terms of depressed credit and lingering inflationary expectations is evident.

Colombia, by contrast, is grappling with persistent supply-side pressures, particularly in food and energy, that are proving resistant to interest rate moves. Forward-looking, much depends on whether the Argentine slowdown becomes entrenched—a point that hinges on sustaining the fiscal discipline that has already triggered social tensions—and whether Colombia’s central bank can signal enough resolve to anchor expectations without choking off growth. For now, the region’s inflation story remains one of contrasting trajectories: a tentative deceleration in the Southern Cone set against stubborn acceleration in the Andes.