Chile: Inflation remains within tolerance range in January
Consumer prices rose 0.5% in January compared to the prior month, up from a 0.1% month-on-month rise in December and substantially overshooting analysts’ expectations. According to the National Statistical Institute (INE), January’s uptick was underpinned by higher prices for food and non-alcoholic drinks, and housing and basic services.
Inflation came in at 2.2% in January, down marginally from 2.3% in December, but remaining in the Central Bank’s 2.0%–4.0% tolerance range for the second straight month. After stripping out volatile categories, core consumer prices rose 0.3% month-on-month in January, up from 0.1% in December, while core inflation dipped from 1.9% in December to 1.8%. The performance of headline inflation is encouraging, and likely to vindicate the Central Bank’s judgement at its most recent policy meeting that further monetary loosening is unlikely to be required in the short term. However, the Bank will be mindful of subdued core inflation, which is still tracking below the 2.0% lower bound.