Chile Inflation August 2016


Inflation recedes to over-two-year low in August

In August, consumer prices were flat over the previous month and below July’s 0.2% increase. The print fell slightly short of market expectations of a modest 0.4% increase. According to the Statistical Institute, the fact that prices were stable mainly reflected that higher prices for food, non-alcoholic beverages, clothing and footwear balanced lower prices for transport and several other categories.

Inflation fell from July’s 4.0% to 3.4% in August, which marked the lowest reading in more than two years and brought inflation closer to the center of the Central Bank’s target range of 3.0% plus/minus 1.0 percentage point. Core consumer prices, which exclude volatile categories such as oil, fresh fruit and vegetables, grew 0.1% in August over the previous month, coming in below July’s 0.4% increase. Core inflation edged down from 4.2% in July to 3.9% in August.

The Central Bank projects that inflation will end this year at 4.0% and 2017 at 3.2%. Panelists participating in the LatinFocus Consensus Forecast expect inflation to close 2016 at 3.6%, which is unchanged from last month’s forecast. For 2017, the panel sees inflation at 3.0%.

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Chile Inflation Chart

Chile Inflation August 2016 0

Note: Year-on-year and monthly variation of consumer price index in %.
Source: Chile National Statistical Institute (INE).

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