Chile: February CPI Surprises with an Increase Above Expectations

The annual inflation in the series rises to 4.5%. As a result, the dollar crashed 2% as expectations for rate hikes suddenly increased.

Gabriel Micillo•Friday, March 8, 2024•1 min read

The annual inflation in the series rises to 4.5%.

The Consumer Price Index (CPI) registered a monthly variation of 0.6% in February, as reported by the National Institute of Statistics (INE). Increases in transportation and housing and basic services stood out.

The Consumer Price Index (CPI) recorded a monthly variation of 0.6% in February, an advance that exceeded expectations by a significant margin, pushing the 12-month indicator to 4.5% compared to the base series of the index.

“The increases in transportation and housing and basic services stood out, while recreation, sports, and culture decreased,” indicated the National Institute of Statistics when announcing the CPI.

Eight out of the thirteen divisions comprising the CPI basket contributed positively to the monthly variation of the index, while four showed negative contributions, and one division registered no contribution.

Analysts had expected a 0.2% increase in the CPI for the second month of the year, according to the consensus of estimates.

Among the divisions with price increases, transportation (1.4%) with 0.187 percentage points (pp.) and housing and basic services (0.9%) with 0.161pp stood out. The remaining divisions contributed a total of 0.288pp.

Recreation, sports, and culture (-0.4%), with an incidence of -0.021pp, stood out among the divisions that recorded monthly decreases in prices.

In transportation, the increase in airfares (10.6%), particularly in international transportation (19.4%), stood out, while in housing and basic services, the most significant increase was in rent (1.7%).

As a result, the dollar crashed as expectations for rate hikes suddenly increased in Chile. The USD/CLP went down 20 pesos and stood at $960. Way lower than the $1000 registered just a month ago.

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Gabriel Micillo

Gabriel is a certified public accountant graduated from UNNE (National University of the Northeast, Argentina) and a software developer, currently pursuing a Master's degree in Finance and Economics. With nearly 8 years of experience working for accounting firms and brokerage firms. Concurrently, he has produced economic and financial reports on the current state of regional economies for the clients of the establishments where he has worked. Additionally, he assisted colleagues like Ignacio Teson in the drafting and editing of articles on similar topics in English language.