Los Consumer prices in Chile registered the highest monthly increase since August and core inflation remained high, supporting the central bank in its determination to maintain a tight monetary policy.
He consumer price index rose 1.1% in March compared to the previous month, in line with the median forecast of analysts surveyed by Bloomberg. The annual variation of the CPI was 11.1%, the lowest level since April last year, the National Institute of Statistics (INE) reported on Thursday.
Ehe Central Bank of Chile maintained its monetary policy rate at 11.25% this week, the highest level in more than two decades, and warned that the economy is taking longer to cool down and that consumer prices remain more resilient than expected. The monetary authority also raised its inflation projection for 2023 to 4.6%, above the target of 3%. Cost of living increases have been pressured by consumer demand that has resisted rising interest rates.
Education costs increased 10.8% in the month the school year began, while the prices of food and non-alcoholic beverages rose 0.4%, according to the INE. For their part, transportation costs fell 0.7%.
If volatile components are excluded, inflation was 10.8% in March, higher than the 10.7% of the previous month. Inflation has remained “fairly constant” in recent months, central bank board members wrote on Tuesday, who expect rising consumer prices to reach target by the end of 2024.
After the declarations of the central bankinvestors in Chile reduced bets on the start of rate cuts, and most estimate that the easing will begin in the third quarter. The operators surveyed by the monetary authority foresee that inflation will remain above the target during the next two years.
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In the rest of Latin America, progress in controlling above-target inflation has been uneven. Consumer prices rose more than expected last month in Colombia and Peru, while headline inflation slowed more than expected in Mexico.
Chilean President Gabriel Boric participated on Wednesday in a virtual meeting of Latin American leaders on ways to deal with inflationary pressures.
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