Chile Inflation


Inflation remains at a three-year low in May

In May, consumer prices were unchanged over the previous month, which contrasted the 0.5% drop recorded in April and was slightly below the 0.1% rise expected by market analysts. According to the statistical institute, the flat reading was mainly due to lower prices for water, electricity and gas, which offset higher prices for food and non alcoholic drinks.

Annual headline inflation rose 1.0% in May, which is unchanged from April and marks the lowest level since April 2010. At the current level, inflation remains well below the Central Bank's target of 3.0% with a plus/minus 1.0 percentage point tolerance margin.

Meanwhile, the core inflation index, which excludes volatile categories such as oil, fresh fruit and vegetables, grew 0.1% over the previous month. Annual core inflation inched down from 1.2% in April to 1.0% in May.

In the latest Monetary Policy Report from March, the Bank sees year-end inflation at 2.8% in 2013 and 3.0% in 2014. LatinFocus Consensus Forecast panellists expect inflation to close the year at 2.8%, which is down 0.2 percentage points from last month's forecast. For 2014, inflation is expected to increase at 3.0%.


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Chile Inflation Chart

Chile Inflation May 2013

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

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