In the July central bank poll, released late on Thursday, economists put August inflation at 0.7 percent, down from a 0.9 percent forecast for July.

July inflation came in lower than expected at 0.6 percent, the Economy Ministry reported on Thursday, benefiting from a drop in clothing and shoe prices and by stability in food and beverage values.

Argentina's consumer price index rose 5.5 percent in the first seven months of the year. Twelve-month inflation through July reached 10.6 percent, its lowest level in 10 months and down from 11.0 percent through June.

The government's main strategy for taming inflation has been to persuade manufacturers and retailers to lower and freeze prices on a host of basic goods.

"It is apparent that the recent favorable performance of inflation owes much to the continuing de facto price controls," Dresdner Kleinwort said in a research note on Friday.

Although the central bank tightened monetary policy by raising bank reserve requirements recently and has worked to nudge interest rates higher, the price accords were key, the investment bank said .

The government also temporarily banned beef exports earlier this year to push domestic meat prices lower -- a strategy that enraged the farm sector but effectively dampened retail values. The restrictions were loosened but are still in place.

"Without government intervention, particularly with respect to foodstuff prices and a freeze on utility prices, there is little doubt that inflation would be much higher," Dresdner Kleinwort added.

The government froze public utility rates at the height of the 2001-2002 economic crisis, and it has slowly negotiated rate hikes but left residential tariffs largely untouched.

Inflation is seen persisting, however. Analysts polled by the central bank put the 2007 figure at 11.2 percent, down from 11.5 percent last month.