Chile: Inflation ticks up in April

Consumer prices rose 0.3% in April compared to the prior month, up from March’s 0.2% increase and beating analysts’ expectations of a 0.2% rise. According to the National Statistical Institute (INE), the uptick was driven by higher prices for healthcare, and housing and basic services, which were partially offset by a decrease in clothing and footwear prices.

Inflation edged up from 1.8% in March to 1.9% in April and now lies just below the lower bound of the Central Bank’s 2.0%–4.0% tolerance range. After removing volatile categories such as fruit, vegetables and fuel, core consumer prices rose 0.4% month-on-month in April, up from 0.3% in March and the strongest increase in six months. Meanwhile core inflation came in at 1.7%, matching March’s revised print (previously reported: 1.6%). The significant appreciation of the peso against the dollar since December last year is likely playing a key role in softer price pressures.

Chile Inflation Forecast

The Central Bank predicts year-end inflation of 2.3% in 2018 and 3.0% in 2019. Last month, FocusEconomics Consensus Forecast panelists expected inflation to end 2018 at 2.7%, which was down 0.1 percentage points from the previous month’s forecast. The panelists saw inflation ending 2019 at 3.0%. A new Consensus Forecast will be published on 15 May.