The monthly rise in the consumer price index (CPI) clocked in at 7.8%, the country's statistics agency said on Wednesday, well below analyst estimates of an 8.9% increase and under the 8.4% posted in April, the largest monthly rise in decades.

Annual inflation, at its highest level since 1991, was also below a Reuters analyst poll of a 116.1% increase. It remains one of the fastest inflation rates in the world and is far above neighboring countries.

Argentina has long battled high inflation, currency weakness and indebtedness, but high global prices linked to the war in Ukraine and a historic drought have hindered the government's ability to rein in prices and stabilize the economy.The fast-rising prices have sapped earning power and savings, battered the Peronist government's popularity with voters ahead of general elections in October and left around four in every 10 people in the country in poverty.

Argentina's central bank has been forced to hike the benchmark interest rate to 97% in a bid to tamp down inflation and protect the peso currency, with inflation remaining high even as Brazil, Mexico and Chile have seen prices start to cool.

A central bank source told Reuters on Wednesday that a slower-than-expected inflation reading should mean the entity can avoid a new rate hike at its weekly meeting on Thursday.