Chile recorded a 0.6% increase in consumer prices in August compared with July, marking the fastest month-on-month rise since April and surpassing consensus expectations, official figures showed on Tuesday.
The monthly rate escalated from 0.1% in July and exceeded the 0.3% median forecast in a poll of economists as well as the expectation of central bank traders.
Statistics agency INE identified food and non-alcoholic beverages and transport as the principal contributors to the monthly uptick. Food and non-alcoholic beverages advanced 1.4% versus the prior month, while transport costs rose 1.6% month-on-month. Overall, nine of the 13 categories in the consumer basket registered monthly price increases.
On an annual basis, inflation accelerated to 4.1% in August from 3.5% in July. That level places annual inflation outside the central bank's stated tolerance range of 3%, plus or minus one percentage point.
Key details
- Monthly change: Consumer prices up 0.6% in August from July, the fastest monthly rise since April.
- Forecast comparison: The monthly increase beat the 0.3% median forecast from economists and expectations of central bank traders, and rose from 0.1% in July.
- Main drivers: Food and non-alcoholic beverages (+1.4% month-on-month) and transport (+1.6% month-on-month) provided the largest upward pressure; nine of 13 consumer-basket categories posted monthly gains.
- Annual rate: Year-over-year inflation moved to 4.1% from 3.5% in July, outside the central bank's 3% +/-1 percentage point tolerance band.
Implications for sectors
The report highlights direct price effects in the food and transport portions of the consumer basket, which are the categories that registered the largest monthly increases. Broader consumer spending categories also saw more widespread price rises, with nine out of 13 groups recording increases for the month.
Risks and uncertainties
- Inflation moving to 4.1% from 3.5% introduces uncertainty around the outlook for price stability - this development affects consumer-facing sectors, notably food and transport.
- Persisting monthly gains across a majority of consumer-basket categories leave uncertainty about whether elevated price pressures will continue to appear in coming months - this is relevant for households and sectors sensitive to input and consumer prices.
Where the data is limited, the release does not specify how long the recent monthly acceleration will last or the precise implications for monetary policy beyond noting that the annual rate now lies outside the central bank's tolerance range.
Statistics agency INE provided the monthly and annual inflation figures and the breakdown showing the largest contributors to the monthly increase.