Chile Eyes 3% Inflation Target for 2024

Chilean experts predict inflation will hit 3% by 2024’s end, matching the Central Bank’s goals.

This follows a trend of slowing price rises, with a 3.8% increase noted until January, the Central Bank of Chile shared on Monday.

The bank’s February survey shows economists expect inflation to rise by 0.2% this month and 0.4% in March. This comes after January’s unexpected 0.7% jump.

They also see the GDP growing by 0.5% this quarter and 1.7% across 2024. For 2025, a 2.1% growth is anticipated.

Analysts believe the monetary policy rate will drop to 6.25% in April from 7.25%. This cut aims to manage inflation by lessening monetary support.

In late January, the Central Bank cut the interest rate, forecasting a “neutral level” of 4-4.5% later this year.

This move comes as the economy starts recovering from the pandemic’s effects. Last year, Chile’s economy slightly shrank by 0.2%, early data shows.

Despite recent challenges, this context underlines the country’s effort to stabilize and grow economically.

Background

Chile’s 3% inflation goal by 2024 and monetary policy tweaks uniquely position it in Latin America.

Latin American countries are tackling economic growth and inflation, worsened by the pandemic.

Regionally, higher inflation arises from currency depreciation, supply issues, and commodity price changes.

Countries like Argentina and Venezuela face hyperinflation, while Brazil and Colombia battle moderate to high inflation but are implementing countermeasures.