Argentina’s monthly inflation rate dropped to 4.2% in May, the lowest since 2022, marking the fifth consecutive month of decline, as per official data released Thursday. This is the smallest month-on-month price rise since early 2022, below the forecasted 4.9% increase, and significantly down from December’s peak of over 25%. Annual inflation also decreased from April’s peak to 276.4%, though it remains among the highest worldwide.

Despite these improvements, many Argentines still struggle with high costs for food, utilities, and transportation, finding the minimum monthly wage of 234,315 pesos ($260) insufficient. Silvia Castro, a 65-year-old retiree, expressed confusion over the reported decrease in inflation due to persistent high expenses.

The latest inflation figures might lead Argentina’s central bank to further reduce the benchmark interest rate, which has already been lowered from 133% in December to 40%. The government attributes its success in controlling inflation to stringent measures such as reducing central bank money printing, rebuilding reserves, and cutting spending.

Financial markets responded positively on Thursday after the Senate approved a significant reform package essential to President Milei’s economic strategy, resulting in a rally in Argentina’s bonds and currency. However, Milei’s administration still faces challenges in maintaining voter support amid a stalled economy and rising poverty. Laura Basualdo, a 53-year-old merchant, highlighted that many people are struggling to afford basic goods due to the persistently high inflation.