BUENOS AIRES (Reuters) – Argentina's monthly inflation rate stood at 3.9% in August and is expected to close the year at an annualized rate of nearly 123%, according to analysts surveyed by the central bank in a poll published on Thursday.

The new forecast marks a reduction of 4.75 percentage points compared to last month's survey.

Prices are seen rising by 3.5% in September, according to the poll, slowing down after a surge that followed deep spending cuts as well as the devaluation of the peso currency enacted by libertarian President Javier Milei in a bid to reduce sky-high inflation.

Analysts also projected a 3.8% year-on-year drop in the South American economy's real gross domestic product (GDP) for 2024, slightly lower than their prior estimate.

"The activity level would begin to recover in the third quarter of the year, with a rise of 0.9%," according to the survey, while participants estimated growth would average 3.5% in 2025.

The survey polled 42 analysts from August 28-30.

(Report by Nicolas Misculin; Editing by Sonali Paul)