Chile’s Inflation Eases to 4.7% in February, Central Bank Likely to Hold Rates
Chile’s inflation rate decreased to 4.7% in February 2025, the National Institute of Statistics (INE) reported last Friday. This marks a slight improvement from January’s 4.9% figure but still exceeds the central bank’s target range of 2% to 4%.
Monthly inflation rose by 0.4%, matching market expectations and showing a significant slowdown from January’s 1.1% increase. Transportation costs jumped 1.0% while housing and basic services increased by 0.5%, becoming the main drivers of February’s inflation.
The central bank paused its monetary easing cycle in January, keeping the benchmark interest rate at 5%. Analysts believe rate cuts remain unlikely despite the improving inflation outlook due to external challenges.
Ten of the thirteen divisions in Chile’s consumer price index basket showed price increases during February. Only two categories recorded decreases, with home equipment and maintenance dropping by 0.2%.
Core inflation also moderated to 0.3% for the month, down from 0.8% in January. Specific product prices tell a clearer story about consumer pressures. Gasoline prices rose 2.3%, while liquefied gas increased by 2.5%.
Bread prices climbed 1.9%, and rental costs went up by 1.1%. Meanwhile, domestic air transport dropped substantially by 14.4%. Chile has worked diligently to restore macroeconomic balance following pandemic disruptions.
Chile’s Economic Outlook
The economy recovered strongly with 11.7% growth in 2021 but has since moderated. Economic forecasts project 2.4% growth for 2025, reflecting Chile‘s gradual return to stability.
The country faces ongoing challenges in boosting productivity and addressing inequality. Despite slowing inflation, consumer prices for housing and utilities remain elevated at 11.6%, though down from 12.1% in January.
Chile’s economic outlook remains cautiously positive as it navigates post-pandemic recovery. The government continues to implement policy measures aimed at sustainable growth while fighting inflation pressures.
Current economic indicators suggest Chile maintains its reputation for sound macroeconomic management amid global uncertainties and domestic challenges.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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