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Chile Inflation January 2024

Chile: Inflation drops to lowest level since May 2021 in January

Inflation came in at 3.8% in January, which was down from December’s 3.9%. January’s figure represented the lowest inflation rate since May 2021, and marked the second consecutive month that inflation has been within the Central Bank’s 2.0%–4.0% target range.

Annual average inflation fell to 6.9% in January (December: 7.6%). Meanwhile, core inflation fell to 3.8% in January, from the previous month’s 4.2%.

Finally, consumer prices increased 0.67% in January over the previous month, swinging from the 0.54% fall recorded in December and beating market expectations of a 0.4% rise.

It should be noted that from January 2024 the statistics office introduced a new consumption basket, which altered the relative weights of the goods included, among other changes.

On the monetary policy implications, Itaú Unbanco analysts said:

“While the January print surprised to the upside, the new basket reflects lower levels of inflation with headline inflation even closer to the target. With the positive output gap expected to have closed, and anchored inflation expectations, the Board will continue to cut rates at the start of April.”

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