Chile: Inflation comes in at highest level since October 2023 in January
Latest reading: Inflation rose to 4.9% in January, above December’s 4.5%. January’s result marked the highest inflation rate since October 2023. Looking at the details of the release, transportation prices rose at a quicker pace in January compared to the previous month, while price pressures for housing, utilities and fuel also picked up pace. The latter was the result of an increase in electricity tariffs in January, as part of a progressive rise in tariffs since H2 2024 following a price freeze during the pandemic.
Annual average inflation rose to 4.4% in January (December: 4.3%). Meanwhile, core inflation rose to 4.1% in January from December’s 4.0%.
Finally, consumer prices rose 1.06% over the previous month in January, contrasting December’s 0.20% fall. January’s figure was the highest reading since March 2023 and was above market expectations.
Panelist insight: On the reading and near-term outlook, Goldman Sachs’ Sergio Armella said:
“Inflation printed above our forecast in January driven in part by higher prices in the other non-core category. We also note that this was the final large increase scheduled for electricity tariffs bringing the June-January total increase to 58.9%, in line with our expectations. If we remove electricity tariffs, inflation is tracking at a visibly lower, albeit still above target, 3.7%. We expect sequential inflation readings to remain somewhat firm in the first quarter but anticipate a fast decline of annual inflation readings in the second half of the year as prints benefit from lapping the large increases to electricity tariffs that took place in 2024.”