Chile: Inflation inches up in October on higher food prices
November 8, 2010
In October, consumer prices rose 0.1% over the previous month. The increase was below the 0.4% rise recorded in September and undershot market expectations of a 0.2% rise. The monthly reading reflected an increase in prices for food and non-alcoholic beverages (+0.8% month-on-month) and housing (+0.7% mom), which was partially offset by lower prices for leisure and transport. Despite the moderate price increase, annual headline inflation inched up from 1.9% in September to 2.0% in October. The core inflation index, which excludes volatile categories such as oil, fresh fruits and vegetables, dropped 0.1% over the previous month. Annual core inflation remained unchanged at September's 1.5%. The Central Bank has a medium-term inflation target of 3.0%, with a 1% tolerance margin and currently expects inflation to close the year at 3.9% and to moderate to 3.2% by the end of 2011. Consensus Forecast panellists expect inflation to close the year at 3.4%, which is down 0.1 percentage point from last month's forecast. For 2011, inflation is expected to fall to 3.2%.