Chile: Inflation drops to 19-month low
July 6, 2012
In June, consumer prices slipped 0.3% over the previous month, which followed on the flat reading registered in May and surprised private sector analysts, who had seen consumer prices rising 0.1%. The drop, which represented the sharpest monthly decline in 30 months, was broad-based, with prices for clothing and footwear as well as for utilities leading the decline. As a result of the monthly fall, annual headline inflation declined from 3.1% in May to 2.7% in June, which represents the lowest level since November 2010. As a result of the moderation, annual inflation fell back to the Central Bank's target of 3.0% for the first time since February 2011. The core inflation index, which excludes volatile categories such as oil, fresh fruit and vegetables, remained unchanged over the previous month (May: 0.3% month-on-month), prompting annual core inflation to fall to 2.5% in June, from 2.7% in May. In its June Monetary Policy Report, the Central Bank revised its inflation forecasts for this year. Accordingly, the Bank expects inflation to end this year at 2.7%, down from its previous 3.5% estimate. For 2013, monetary officials maintained their forecast and anticipate inflation closing the year at 3.0%.