Chile: Inflation rises in August, but remains below the Central Bank's target
September 8, 2017
Consumer prices rose 0.2% in August compared to the prior month, matching July’s figure and coming in slightly below analysts’ expectations. According to the National Statistical Institute (INE), August’s increase was underpinned by higher prices for food and non-alcoholic beverages and housing and basic services, which more than offset lower transport prices.
Inflation came in at 1.9% in August, up from July’s 1.7% in July. As a result, inflation remains outside the Central Bank’s 2.0%-4.0% tolerance range for the third consecutive month. The market took this as a sign that further monetary easing could be in the offing, with the Chilean peso losing value against the dollar soon after the announcement. After stripping out volatile categories such as oil, fresh fruit and vegetables, core consumer prices were flat month-on-month in August, contrasting July’s 0.4% rise, while core inflation was 1.9% in August, compared to 2.0% in July.
Author: Oliver Reynolds, Economist