Chile: Inflation softens in February
Consumer prices were flat in February compared to the prior month, down from January’s 0.5% rise and undershooting analysts’ expectations. According to the National Statistical Institute (INE), in February significantly higher public transport costs were offset by lower prices for food and non-alcoholic beverages.
Inflation dipped from 2.2% in January to 2.0% in February, touching the lower bound of the Central Bank’s 2.0%–4.0% tolerance range. After stripping out volatile categories such as fruit, fresh vegetables and fuel, core consumer prices rose 0.1% month-on-month in February, down from 0.3% in January, while core inflation fell from 1.8% in January to 1.6% in February. Weak price pressures are likely partly being driven by the significant appreciation of the peso against the dollar since December last year, as the Central Bank highlighted at its most recent monetary policy meeting. However, with the economy performing robustly, the BCC is unlikely to trim rates in the near term.