Chile: Inflation eases unexpectedly
December 7, 2012
In November, consumer prices fell 0.5% over the previous month, which contrasted the 0.6% increase registered in October and defied market expectations of a flat reading. The monthly result represented the sharpest drop since February 2009. According to the statistical institute's press release, lower prices for food and non-alcoholic beverages as well as for transport drove the monthly decline.
As a result, annual headline inflation fell from 2.9% in October to 2.1% in November, the lowest level in more than two years thus remaining within the Central Bank's target of 3.0% with a plus/minus 1.0 percentage points tolerance margin. Meanwhile, the core inflation index, which excludes volatile categories such as oil, fresh fruit and vegetables, fell 0.2% over the previous month, contrasting October's 0.2% increase. Annual core inflation fell from 2.1% in October to 1.7% in November. In the latest Monetary Policy Report from September, the Bank sees year-end inflation at 2.5%. For 2013, monetary officials expect inflation to end the year at 3.0%.