MercoPress. South Atlantic News Agency

Chile suffers highest inflation in twelve years, 7.8%

Consumer prices in Chile rose 0.5% in December and the annual rate reached 7.8% the highest level since June 1996 according to the latest report from the government-run National Statistics Institute, INE.

Annual inflation in Chile has accelerated from 2.6% in 2006 to close out 2007 at a level that is almost double the Central Bank's target of 3 percent plus or minus one percentage point. According to INE, Housing (1.4%); Transport (1.4%); Education and Leisure (0.7%); Health (0.6%) and Others (0.6%) had the main impact while Food dropped 0.9%, Clothing 0.1% and Housing equipment remained unchanged. INE explained that the December jump can be explained by the increases in public utilities rates, electricity 3.6%; natural gas 14%; kerosene 4.5% and drinking water, 1.4%. In Transport, air tickets increased 16.1% and inter provincial bus tickets, 21.3%; in Education, school fees jumped 5.7%. In the Food item, milk dropped 1% and fresh fruit and vegetables had a decisive impact with prices falling in the range of 28 to 34%. Regarding the 7.8% annual consumer prices index, Food and Housing were the most influential for the index. Food soared 15.2% with an annual incidence of 3.75% and Housing, 12.1% and a 2.69% incidence in the overall consumer prices index; together they represent 6.44% of the annual index, points out the INE report. In the rest of the items, Others jumped 6.8%; Education and Leisure, 3.2%; Transport 1.9%; Health and Clothing actually had negative showings. Core inflation, which strips out the prices of minus fresh fruit, vegetables and fuel, accelerated 0.9% in the month and 6.3% from December last year, said INE.