One year after Argentina launched a dramatic surprise attack on inflation, and three months after Brazil followed with a similar economic shock, officials in both countries say they have demonstrated an alternative to the traditional remedy of recession to curb inflation.

But despite spectacular successes in leveling what were some of the steepest cost-of-living increases in the world, Argentina and Brazil still face fiscal deficits, oversized public sectors, inefficient state-run enterprises and other structural deformities -- traditional spurs to inflation that numerous analysts say must be corrected to prevent wages and prices from spiraling upwards again.

Most disappointing of all, the anti-inflation plans have failed so far to revive business confidence, even after sparking surges in consumer demand. New investment is missed especially in Argentina, which has suffered years of industrial decline, in contrast to Brazil's recent high growth rates.

What has been unorthodox about the South American approaches is their insistence that inflation can be squelched by attacking the psychology of inflation without sacrificing economic growth. This thinking runs counter to past anti-inflation formulas of the International Monetary Fund aimed mainly at dampening aggregate demand through government spending cuts and monetary restrictions.

"Our goal was not only to bring down inflation, but to do it without recession," said Mario Brodersohn, Argentina's secretary of finance.

After living with inflation for years, people here had come to expect it and had adopted indexing mechanisms and other plans to guard against monetary erosion. The result was a certain inertial inflation.

To break this, Argentina froze wages, prices and foreign exchange rates, replaced the debased peso with a new currency called the austral, and pledged not to issue new money to finance the deficit. Brazil also froze prices, de-indexed wages and introduced a new currency dubbed the cruzado.

"This is not just another round of price controls," Edmar Bacha, head of Brazil's statistics bureau and an architect of the program, said in a recent interview.

"Some Americans say we're just attacking appearances, not the substance of inflation. But there is a psychological element to inflation that feeds on itself.

"We've entered a new battlefield," he added. "Though we may lose future battles, I think this first victory is here to stay."

While Brazil's anti-inflation plan is still relatively new and very popular, Argentina's program has been losing public support, prompting officials here to relax controls in April.

The government has moved from a policy aimed at stabilizing prices to one defined as "stabilizing inflation." The wage-price freeze has given way to a system of "administered" increases, which some analysts worry could lead to a new inflationary spiral.

Prices in Argentina are now rising at about 4 percent a month on the average -- still high by U.S. or European standards, but only a fraction of the 30 to 40 percent monthly jumps that existed before the austral plan took effect on June 14, 1985. In Brazil, inflation is currently running around 1 percent a month.

According to a recent poll, Argentines now worry less about price hikes than about unemployment.

As a sign that shopping behavior has returned to normal, storekeepers who formerly insisted on cash payment are offering installment plans today.

By eliminating inflation as the daily obsession it once was, the government had hoped to be able to extend the country's planning horizon and concentrate on correcting longer-term structural problems.

But public debate on how to reactivate private industry and how to restructure the public sector is being overshadowed by angry union protests.

This has left President Raul Alfonsin's small economic management team largely preoccupied with managing wage policy.

A 24-hour general strike last Friday -- the sixth since Alfonsin took office two and a half years ago -- disrupted economic activity across the nation.

The General Labor Confederation, a nationwide umbrella group of trade unions aligned with the opposition Peronist movement, has attacked the austral plan for causing a drop in real wages and for failing to revive production or attract foreign investment. The unions have portrayed the anti-inflation program as having been dictated by the IMF, the United States and other creditors holding Argentina's $50 billion foreign debt.

"It's a power struggle," said Guido Di Tella, a pro-Peronist economist, describing union-government relations. "I think we'll have lots of strikes until the end of the Alfonsin period. We're in a kind of Italian situation."

The government authorized a 5 percent wage increase for public employes in January, and decreed another 5 percent rise in April (8.5 percent for private-sector employes). But workers say their incomes do not stretch as far they did a year ago.

"I was saving to buy a house before," said Victor Hugo Villafane, a metallurgical worker in West Bernal, a blue-collar neighborhood of Buenos Aires. "Now there's nothing left over to save."

Argentine officials say that the austral plan was an anti-inflation program, not a development plan, and could not be expected to reverse in a year this country's long economic decline.

Domestic output per capita in Argentina today is about at the level it was in 1974.

Unfortunately for Alfonsin, the kind of dramatic success that accompanied the introduction of the austral plan cannot be produced every day. Although presidential aides are working on a program of structural changes, the gains are bound to appear less spectacular.

Aside from curbing inflation, the government has scored some other notable successes. The deficit, which was at 15 percent of gross domestic product when Alfonsin assumed power in late 1983, has been narrowed to a projected 4 percent of GDP this year -- although this was achieved mostly by increasing revenues rather than by decreasing public expenditures.

Argentine officials have refinanced much of the country's foreign debt at lower interest rates.

The government also claims to have stopped capital flight, a damaging trend that involved Argentines placing an estimated $30 billion overseas since 1976 in a show of no confidence in their own economy.

Nonetheless, Alfonsin appears to have lost the political momentum the anti-inflation program gave him. He has been cautious about taking further steps, and critics charge he has missed an opportunity for pushing through fundamental structural reforms.

Enrique Szewach, an independent economist, said Alfonsin "has lost a lot of time in moving to restructure the public sector. Either he has underestimated his power to do so, or he still is not convinced it is really necessary."

Aides say the president is committed to streamlining the public sector. In February, the government proposed selling six state-run enterprises as a start towards a privatization program.

But finding buyers and working out terms for divestitures involve lengthy deliberations that are expected to run well past this year.

In any case, until private industry revives and provides new employment slots for displaced state workers, Alfonsin is bound to refrain from drastic reductions in state payrolls.

"It's a chicken-and-egg problem," said a foreign diplomat. "The private sector is reluctant to move forward with investments until convinced that the situation has permanently changed. But Alfonsin doesn't want to put too much pressure on the public sector, so long as fired employes have nowhere else to go."

Most of the economic growth recorded in recent months has been consumer-led. It is strongest in such areas as home appliances and textiles, rather than in such key economic sectors as energy, agricultural exports and industrial production. Capital spending by businesses has tended to be for replacement of old equipment, not for general expansion.

To launch Argentina into a new era of growth, government officials no longer are looking towards domestic private industry.

Firms here have suffered a transfer of resources to the public sector through taxes to help cover the deficit. They cannot easily afford to borrow for expansion at high local interest rates, and their borrowing power abroad is limited.

Instead, the administration is counting on international sources, particularly the World Bank, to provide sectoral loans to stimulate Argentina's economic rebirth.