MercoPress. South Atlantic News Agency

Inflation in Chile at its highest level since March 1994

Transport and food were the items which had the largest influence in the 1,4% CPI increase during July

As is happening in the rest of the world, there is no yielding from inflation in Chile, once the showcase of political stability and orthodox economics in Latin America. In effect, the July CPI climbed 1,4% with 8,5% in seven months, and the annual rate reached 13,1% the highest level since March 1994.

 Chile's Stats office said that ten out of twelve chapters that make up the CPI basket were positive in the monthly index, with only one negative and another neutral. Transport, Food and non alcoholic beverage registered the highest increase while at the other end stood clothing and footwear.

“The increases in transport and food, continue the trend of previous months and reflect the higher international prices for energy, --oil and gas-- and several commodities”, indicated Andrés Pérez head of Itaú Bank head of economists.

Besides, “there are major risks taking into account the strong depreciation of the Chilean Peso against the US dollar in recent months because of a degree of political instability and lesser purchases of copper by China, so this means that our estimate of 12% inflation for the whole of this year will fall short”, indicated Nataly Venegas a market analyst from FX Globe.

She added that to this must be added global transport bottlenecks, difficulties in the supply lines, particularly when it involves shipping and containers, which make for dearer imports plus the weakened Peso against the US dollar.