Chile: Inflation increases in December
Latest reading: Inflation came in at 4.5% in December, which was up from November’s 4.2% and above the Central Bank’s 2.0–4.0% target range. The figure was largely due to faster rises in prices for transport plus housing and utilities. The latter has been spurred in recent months by electricity tariff hikes in July and October, with a further near-10% tariff hike to be implemented from January 2025.
The trend pointed up slightly, with annual average inflation coming in at 4.3% in December (November: 4.2%). Meanwhile, core inflation rose to 4.0% in December from the previous month’s 3.7%.
Lastly, consumer prices fell 0.20% in December over the previous month, contrasting November’s 0.26% increase.
Panelist insight: On the inflation and monetary policy outlook, Itaú Unibanco analysts said:
“While inflation came in below the BCCH’s recently updated forecasts, the sustained weakening of the CLP, real wage growth that sits above 4% (well above the 1.9% YoY 2016-2019 average), along with signaling in the MPM meeting’s minutes that validate the option of pauses in the easing cycle amid elevated uncertainty leads us to believe the Board will hold the policy rate at 5% later this month. January inflation will likely show a notable rebound (0.8-1.0% month on month) as the downside sales event pressures unwind and electricity prices adjust further.”