2025/10/02 | Diego Ciongo & Soledad Castagna
CPI in September unexpectedly fell by 0.1% MoM, below our forecast and market consensus according to the BCP survey (both at +0.1%). Declines in fuel prices (-2.3% MoM) and in some imported durable goods amid the recent appreciation of the PYG were key in the monthly fall. However, the increases in food goods prices such as beef meat (1.7% MoM) and fruits and vegetables (3.3% MoM) partly offset reductions. The core CPI X1 (which excludes fruits and vegetables, regulated service prices and fuel) also fell by 0.1% MoM in September, down from 0.3% MoM a year ago.
On an annual basis, headline inflation fell to 4.3% in September (down from 4.6% in August), while the core X1 CPI remained at 5.2%. Cumulative inflation in the year reaches 3.3%. We note that headline inflation on an annual basis remains within the tolerance range of the BCP’s inflation target (3.5% +/- 2%), while core X1 remains slightly above.
At the margin, both headline and core inflation decelerated in September. Using our own seasonally adjusted figures, the three-month annualized headline inflation reading fell to 3.8% in September (down from 4.9% in August), while core inflation decreased to 2.0% (from 2.3% in the previous month).
Our heat map shows that 58% of the items are below the central bank's inflation target of 3.5%, unchanged from August 2025, and the same level seen in the end-of-2024 data.
Our take: Our inflation forecast for 2025 stands at 4.2%. The swift appreciation of the PYG since the end of June should ease the pressure on tradable prices for the remainder of the year, as was seen in September. The next monetary policy meeting will be held on 24 October, while October’s CPI will be published on 3 November.