Chile: Inflation drops to three year low in April
May 8, 2013
In April, consumer prices fell 0.5% over the previous month, which contrasted the 0.4% increase recorded in March and exceeded the 0.1% drop expected by market analysts. According to the statistical institute, the fall was mainly due to lower prices for transportation as well as for water, electricity and gas.
Annual headline inflation remained on a downward trend, falling from 1.5% in March to 1.0% in April and reaching the lowest level in three years. 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, fell 0.3% over the previous month. Annual core inflation inched down from 1.3% in March to 1.2% in April.
In the latest Monetary Policy Report from March 2013, 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%.