Chilean market forecasts inflation of 12.6% by the end of 2022

Chilean market analysts expect inflation to reach 12.6 percent by the end of the year, slightly higher than the previous month’s forecast (12.5 percent).

This is according to the Economic Expectations Survey (EEE) released Wednesday by the Central Bank of Chile.

Economists surveyed this month for the EEE also pointed out that the Consumer Price Index (CPI) will show a variation of 0.9 percent in the year’s tenth month.

The experts surveyed also forecast economic growth of 2 percent in 2022, which is within the Central Bank Council’s estimate of 1.5 to 2.25 percent this year.

The monetary policy interest rate, a tool used to curb inflation by reducing monetary stimulus, is expected to end the year at 11.25 percent.

Chile’s central bank raised its monetary policy rate for the tenth consecutive month in September, from 9.75 percent to 10.75 percent, the highest level since 1998.

The policymaker said that the decision was made due to the deteriorating global growth outlook, with unfavorable conditions, especially for emerging markets.

The bank will report on a possible new rate adjustment this Wednesday after the monetary policy group recommended raising the rate to 11.50 percent to curb inflation.

The South American country recorded an inflation rate of 13.7 percent in the 12 months to September, with a monthly increase of 0.9 percent caused by the rise in food prices, according to a report by the National Statistics Institute (INE).

The figure was the first annual decline since February 2021 and was in line with the Finance Ministry’s forecasts for a drop in prices in the second half of the year, after prices rose to their highest level in decades due to global inflationary pressures.

Chile’s central bank forecasts inflation at 12 percent in 2022, the highest in nearly 30 years, before falling back to the target range of 3 percent in 2024.

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