Inflation in Chile reached 3,2% in eight months and the US dollar 794 Pesos
The Consumer Prices Index, CPI, in Chile climbed 0,4% during August totaling 3,2% so far this year and 4,8% in the last twelve months, according to the country’s stats office. It is the highest since January 2016, and the tendency is to continue increasing, as had been anticipated by the Central Bank. Likewise with the US dollar.
The current debate over a fourth withdrawal from the old age pensions’ funds has banks and other financial institutions waiting for the unexpected in the midst of great political activity as a new Chilean constitution is being discussed and drafted, and a general election is scheduled for 21 November.
The Chilean central bank which estimates this year’s inflation to reach 5,7% said that nine of the twelve divisions which make up the CPI basket experienced positive reactions in the eighth month, while only three marked negative. Housing and basic services were up 0.9% and restaurants and hotels, also up 1,8%. On the other end Alcoholic beverage and Tobacco were down 0,8%.
Some of the worst offenders were beef, up 2.9% in August, 9,1% in eight months and 13,6% in twelve months. Liquid gas increased 4,1%, some 19,2% so far this year and 21,2% in twelve months. Restaurants climbed 1,5% in August, 3,4% in eight months and 5,3% in the last twelve months. On the other hand pop drinks prices dropped 7,1% in August, down 1,6% in eight months and 0,2% in twelve months. Avocados were down 7,5% and 9,4% in twelve months.
Finally Chilean market analysts warn that if the fourth withdrawal from the pensions’ funds is approved by Congress and takes place, another spike in inflation can be expected. This has already reflected in the US dollar exchange rate which is in the threshold of 800 Chilean Pesos, having closed trading in financial markets on Thursday at 794 Pesos.