Chile: No inflation in December

Chile: No inflation in December

Nader Nazmi - Market Economics
Latam Macro Snapshot | 08 Jan 2013 14:31 |

Consumer prices were flat in December (-0.03% m/m; consensus and BNP Paribas: 0.1%). As a consequence, the year-on-year measure of headline inflation fell from 2.13% y/y in November to end the year at 1.49% y/y, its lowest level since June 2010. Indeed, all key measures of inflation fell in 2012 and ended the year below the floor of the central bank’s 3.0%±1pp implicit target range.

Core CPI inflation as measured by IPCX (excluding fruits and vegetables) was 0.35% m/m in December, resulting in end-year 2012 IPCX inflation of 1.35%, down from 3.27% y/y in 2011. IPCX1, the BCCh's preferred measure of core which also excludes regulated prices, rose by 0.39% m/m in December to result in a 2012 print of 1.85% compared to 2.50% y/y in December 2011.

Details:

The largest positive contributions to inflation came from education (+0.84% m/m), restaurant/hotel (+0.73% m/m) and housing (0.74% m/m) that collectively added 0.19pp to the headline. Prices for beverages and tobacco rose 0.63% m/m in December.

Food prices declined by a large 1.21% m/m in December, reducing headline inflation by 0.26pp.

Price declines were widespread elsewhere as well. Clothing, recreation and communication priced dropped by 1.84% m/m, 0.50% m/m and 0.23% m/m, respectively.