Chile's price growth came in a notch below expectations, with September up 0.4% from August compared with a 0.5% call from analysts polled by Bloomberg. On a 12-month basis, inflation stood at 4.1%, matching the national statistics agency's Thursday update and running slightly below the 4.2% economists anticipated.
Fuel was a big mover, with energy costs climbing 1.9% in September. Transport rose 0.9%, while the food and non-alcoholic beverages category climbed 0.6%. On the flip side, insurance and financial services fell 5.9%. Import costs remain under pressure as the peso sits near its weakest level in more than a year, and drivers are still seeing higher prices at the pump.
Cooling inflation gives a central bank room it did not have before. Market Briefs covers Latin American policy free every weekday.
Central bankers say they are working to cool inflation while high unemployment keeps demand subdued. The benchmark rate has stayed at 4.5% through 2026 so far, and officials continue to stress meeting-by-meeting decisions. Traders surveyed by the monetary authority last month expect rates to remain on hold over the next two years. Led by Rosanna Costa, the central bank's policymakers foresee annual inflation returning to 3% in the second quarter of 2027.
Chile's finance ministry now sees the economy expanding 0.7% this year, down from a prior 1.8% view, while the 2027 outlook was raised to 3.3% thanks to stronger investment. Bloomberg Economics' Felipe Hernandez put it this way: "September CPI data signal lingering price pressures in Chile, with risks from external shocks to food and energy and rising labor costs in services. There's little evidence that weaker activity and domestic demand are meaningfully easing inflation. That supports our expectations for the headline to remain elevated and the core to hover above 3% into year-end." For households and businesses, that points to persistent cost pressures and, based on last month's monetary authority survey, traders expect policy rates to stay unchanged over the next two years - a backdrop that can shape budgets, pricing decisions, and the timing of big purchases.
A downside surprise usually moves the rate path with it. Join Market Briefs free and follow the data.
