Chile records 1.3% inflation in October and again breaks monthly record in 13 years
RIO DE JANEIRO, BRAZIL – Chile’s Consumer Price Index (CPI) registered an increase of 1.3% in October compared to the previous month, the highest monthly figure in 13 years for the second consecutive month, the National Statistics Institute (INE) reported on Monday.
With this variation, Chile accumulated inflation of 5.8% so far this year and 6% in twelve months, above the target range established by the Central Bank between 2 and 4%, just in the first result after the historic rate increase by the Central Bank in mid-October.
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According to INE, seven of the twelve sectors increased their prices, four decreased, and one registered zero incidences. Among the increases, transportation (3.9%) and recreation and culture (7.8%) stood out, and among the decreases, clothing, and footwear (-3.3%).
CHILE CLOSED 2020 WITH AN INFLATION RATE OF 3%
According to the Central Bank, the Chilean economy has recovered earlier than expected from the strong impact of the pandemic, to grow in 2021 up to 11.5%.
However, tax relief for families and early withdrawals from pension funds have led to excess liquidity, putting upward pressure on prices.
Ten days ago, the Chamber of Deputies approved a fourth early withdrawal of 10% of pension funds to help families, further stimulating consumption and raising prices, according to the Central Bank and independent economists.
The initiative launched by opposition legislators will be discussed next Tuesday in the Senate despite the resistance of the conservative government of Sebastián Piñera, which claims that this new withdrawal is not justified because employment has recovered and because it fuels inflation.
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