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Chile Inflation March 2024

Chile: Inflation falls to lowest level since May 2021 in March

Inflation came in at 3.7% in March, down from February’s 4.5% and moving back within the Central Bank’s 2.0%–4.0% target range. March’s figure represented the weakest inflation rate since May 2021. The softer rise was primarily due to a slower increase in prices for food and non-alcoholic beverages.

Annual average inflation fell to 5.7% in March (February: 6.3%). Meanwhile, core inflation fell to 3.3% in March, from February’s 4.2%.

Finally, consumer prices rose 0.37% in March over the previous month, a smaller increase than February’s 0.59% rise and well below market expectations of 0.6%.

On inflation and monetary policy, Itaú Unibanco analysts said:

“Looking ahead, notable upside risks stemming from electricity price adjustments, continued passthrough from the CLP’s depreciation on tradable items, while sequential employment growth and real wage growth of around 2.5% YoY could stall the services inflation adjustment. We project inflation to end the year at 3.5%, with upside risks. We see the BCCh slowing the pace of rate cuts to 50bps in the May 23 monetary policy meeting, as upside inflation pressures persist.”

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