Chile: Inflation rises in June
Inflation came in at 4.2% in June, which was up from May’s 4.1% and above the Central Bank’s 2.0%–4.0% target range. Looking at the details of the release, prices for food and non-alcoholic beverages and housing, utilities and fuel increased at a quicker rate in June. The latter was likely influenced by the re-rating of electricity tariffs which began in July and is set to continue later this year.
The trend pointed down slightly, with annual average inflation coming in at 4.6% in June (May: 4.8%). Meanwhile, core inflation fell to 2.9% in June from May’s 3.3%.
Lastly, consumer prices dropped 0.10% over the previous month in June, contrasting May’s 0.27% increase. June’s result marked the weakest reading since December 2023.
On the near-term outlook, Itaú Unibanco analysts said:
“Headline inflation pressure will continue to rise as electricity price adjustments continue and pass-through from tradables trickles in. Although the distribution component of electricity rates already had a first increase in June, we expect a first relevant jump in the generation and transmission components in July. Furthermore, in July, certain price drops that occurred due to cyberday should be reversed.”