MercoPress. South Atlantic News Agency

Chile's inflation: the highest since December 2008; Central Bank expected to further raise basic rate

November's IPC was 0,5% and 6,7% in twelve months

Chile's Consumer Price Index, CPI, in November climbed 0,5%, in line with market expectations, according to a report from the Stats Office, INE, In the eleven months of the year the IPC reached 6,3% and 6,7% in the last twelve months, which is the highest since December 2008 (7,1%), and far above the Central Bank's target of 3%.

INE reported that eight of the twelve divisions of IPC showed significant increases while four were down.

Leisure and Culture increased 2,7% in November as well as clothing and footwear, while alcohol and tobacco were down 0,5%. In more specific items, tourism climbed 9,1%, and 74,1% in the last twelve months, and gasoline 3% for the eleventh consecutive month, accumulating 30,3% in twelve months.

New car prices were up 2,6% and 15,1% in twelve months; bread was up 3% in the month and 6.9% annually.

Airline tickets were down 16% in November and 50,8% in twelve months, while urban and short-distance transport decreased 7,3% and 31,7% annually.

Economy minister Lucas Palacios described the index “as good news”, which means “prices are beginning to moderate, and are significantly lower than what we have seen in past months”

Anyhow at the coming December 14 meeting, the Central Bank's Monetary Policy office is expected to continue raising the basic Monetary Policy Rate some 125 points, which could then be reaching 3,75%, in a further effort to contain inflation.