Chile: Inflation surged in March amid higher education fees
April 8, 2011
In March, consumer prices rose 0.8% over the previous month, which was well above the 0.2% price rise recorded in February but broadly in line with market analyst expectations. The monthly reading mainly reflected an increase in prices for education (+4.6% month-on-month), as in March came into effect the new education fees for this academic year. The robust price hike also reflected higher prices for food and non-alcoholic beverages as well as for transportation. As a result of the pronounced price increase, annual headline inflation jumped from 2.7% in February to 3.4% in March. The core inflation index, which excludes volatile categories such as oil, fresh fruits and vegetables, rose 0.4% over the previous month. As a result, annual core inflation increased from 2.1% in February to 2.4% in March. The Central Bank has a medium-term inflation target of 3.0%, with a 1% tolerance margin. However, on 4 April the Bank sharply raised its inflation forecast for this year to 4.3% from the previous 3.3%, although it maintained its 3.0% forecast for the end of 2012.