Inflation in Chile surprises again on the rise in February

The CPI recorded a monthly variation of 0.6% and breaks the downward trend of 14 consecutive months.

The National Institute of Statistics (INE) of Chile reported that inflation, measured by the Consumer Price Index (CPI), registered an unexpected rise in Februarybreaking a downward trend that had been maintained for 14 consecutive months.

Market expectations were exceeded, with a monthly variation of the CPI that was above the 0.3% estimated by the most pessimistic analysts. In annual terms, inflation accelerated to 4.5%its highest level since November 2023.

Transportation and housing lead the increases

The transportation and housing and basic services divisions were the ones that had the most impact on the rise in the CPI in February. Air passenger transport experienced a notable increase of 10.6%, while the rent rose 1.7%.

Other products with significant increases were beef (3.1%) and subscription to audiovisual content (9.2%).

Signs of slowdown in some sectors

Although general inflation showed an upturn, some signs of slowdown were observed in certain sectors. The recreation, sports and culture division recorded a drop in four of its 14 classes, with drops in the price of pet food and stationery, among others.

Implications for monetary policy

The rise in inflation could generate pressure on the Central Bank to adjust its monetary policy. The Central Bank aims to maintain inflation around 3% annually, and this new data could lead it to increase the reference interest rate at its next meeting.

In summary, inflation in Chile has once again surprised on the rise in February. Although there are some signs of slowdown in certain sectors, the Central Bank could be forced to adjust its monetary policy to control inflation and keep it within the target range.

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