Chile: Inflation edges up in May
June 8, 2018
Consumer prices rose 0.3% in May, unchanged from the previous month’s reading and coming in slightly above market expectations of a more moderate 0.2% increase. According to the National Statistical Institute (INE), the increase was driven by higher prices for recreation and culture, transport, and alcohol and tobacco, which offset a decrease in food, and footwear and clothing prices.
Inflation ticked up for a second consecutive month in May, coming in at 2.0% (April:1.9%). As a result, inflation now lies within the Central Bank’s 2.0%–4.0% tolerance range, after briefly falling below the lower bound of the range.
After removing volatile categories such as fruit, vegetables and fuel, core consumer prices rose 0.2% month-on-month in May, decelerating from the previous month’s 0.4% increase. Meanwhile, core inflation stood at 1.7%, matching April’s print.
Chile Inflation Forecast
The Central Bank predicts year-end inflation of 2.3% in 2018 and 3.0% in 2019. FocusEconomics Consensus Forecast panelists expect inflation to end 2018 at 2.7%, which is up 0.1 percentage points from last month’s forecast. The panelists see inflation ending 2019 at 3.0%.
Author: Almanas Stanapedis, Economist