Chile’s Inflation Eases, but Energy Costs Still Bite

Chile’s official statistics agency reports that inflation slowed to 4.1% in June 2025, down from 4.4% in May. This marks the lowest annual rate in more than a year, but it remains above the Central Bank’s target range of 2% to 4%.

Consumer prices dropped by 0.4% in June, the sharpest monthly fall since late 2023. Most of the relief came from falling food and clothing prices. Food inflation dropped to 2.3% in June from 4.6% in May.

Prices for vegetables, fruits, and beef all fell, helping families manage daily expenses. Clothing and footwear prices also declined, with annual inflation in this category easing to 0.9%.

However, not all costs are falling. Housing and utilities jumped 10.5% over the past year, mainly because electricity tariffs rose after a government freeze ended in 2024. Restaurant and lodging prices also stayed high, up 6.1% year-on-year.

The Central Bank has kept its main interest rate at 5% for several months, waiting for inflation to settle closer to its target. Officials expect inflation to reach 3% by early 2026, as energy price increases work their way through the economy.

For businesses, the recent drop in inflation means more predictable costs and better planning. For households, slower price rises help stretch paychecks further, but higher energy bills remain a burden.

Chile’s inflation trend shows the country is moving toward greater stability after a period of sharp price increases. The big test now is whether energy costs will settle down and allow both families and companies to benefit from steadier prices. The coming months will show if this new stability can last.

More: Chile news in English, every day from The Rio Times.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error