MercoPress. South Atlantic News Agency

Chile's 2006 inflation rate, 2.6%; 2007 target 3%

Chile's National Statistics Institute (INE) reported 2.6% inflation for 2006, well within the goal set by Chile's Central Bank.

The most notable increases during this last year were in the areas of transport (6.1%), education and recreation (3.7%) and housing (3.3%). The Central Bank is already working on future years' inflation rate goals and has issued a new monetary policy concerning this subject. The document, entitled "Chile's Central Bank Monetary Policy Regarding Inflation Goals," aims for an inflation rate of around 3 percent. Still, Central Bank's authorities are cautious about their goals. President Corbo explained a one percent tolerance range is part of their project, saying that a 3% inflation rate will not last for long given natural economic shocks likely to occur. In their new document the Central Bank states that the cost of keeping an inflation rate less than 3% would result in a drop in the Gross Domestic Product and higher unemployment rates. One of the institution's objectives is to install in the public the idea that a good inflation rate for following years should be around a 3%. The Bank's Survey Division manager Rodrigo Valdés said that "when people have a common reference based in the price stability, this creates an anchor for economy". The Santiago Times