LONDON: Chile’s inflation rate fell for the first time in three months in February after the economy expanded at the slowest pace in almost six years.
Consumer prices rose 4.7 percent from the year earlier, the National Institute of Statistics said Tuesday in a report on its website, compared with 4.8 percent the month before. The median estimate of 19 analysts surveyed by Bloomberg was 4.6 percent. In the month, prices gained 0.3 percent and core prices advanced 0.4 percent, the agency said.
The pressure on the central bank to raise interest rates further is easing as the economy weakens and the peso strengthens against the dollar. Policy makers have raised the key rate by half a percentage point to 3.5 percent since October as inflation remained above the 2 percent to 4 percent target range for much of the past two years. Still, the slowdown will be gradual, said Andres Abadia, a senior economist at Pantheon Macroeconomics in Newcastle.
“We expect inflation to gradually edge down, constrained by the weakness of the economic recovery, the peso’s modest appreciation in the first half and the lagged effect of the central bank’s tightening policy,” Abadia said. Evidence suggests “the monetary cycle is reaching its end with a another modest increase of 25 basis points.”
