Chile Inflation January 2008
Source: http://chileeconomy.blogspot.com/2008/02/chile-inflation-january-2008.htmlPosted on Wednesday, February 6th, 2008 | In Chile, Market Commentary
Chile’s monthly inflation rate was unchanged in January, fueling speculation that policy makers will decide to pause at this week’s interest rate meeting and keep the interest rate unchanged at 6.25 percent. Annual inflation slowed to 7.5 percent from 7.8 percent in December, the government-run National Statistics Institute said today in Santiago.
In January, the decline in food prices, clothing and transportation costs kept the consumer price index unchanged, the institute said. Core inflation rate rose 0.4 percent from December, according to the report.
The central bank last month lifted its benchmark rate to a six-year high after annual inflation in December accelerated to the fastest pace in a decade. Today’s consumer prices report coupled with a separate report showing that the economy slowed in December may allow the bank to keep rates unchanged at its Feb. 7 meeting.
The central bank separately reported that the economy expanded 3.7 percent in December compared to December 2006.
In their monetary policy report published Jan. 16, the central bank cut their expectations for economic growth and said consumer prices in 2008 would rise on average 7.1 percent. Annual inflation ended 2007 at 7.8 percent, the highest since 1996.
Chile’s peso fell the most in two weeks following publication of the GDP and inflation reports, since they served to dampen speculation the central bank will raise borrowing costs this week. The peso dropped 1.3 percent to 472.34 per dollar at 4:20 p.m. New York time yesterday. The peso has gained 5.2 percent so far this year, the biggest advance among a basket of 27 emerging-market currencies.
Nonethless at 6.25 percent Chile’s benchmark rate remains 3.25 percent percentage points higher than the benchmark U.S. lending rate, and this is the widest gap since March 2002.
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Bank, central bank, Chile, Chile, Food Prices, Market Commentary, National Statistics Institute, New York, Santiago, United States
 About Edward Hugh (http://globaleconomydoesmatter.blogspot.com)
Edward Hugh is a macro economist, who specializes in growth and productivity theory, demographic processes and their impact on macro performance, and the underlying dynamics of migration flows. Hugh is a founding member and regular contributor to a number of economics weblogs, including Global Economy Matters, Demography Matters and a number of others. Edward 'the bonobo' Hugh is a Catalan economist of British extraction based in Barcelona. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again". He is currently working on a book with the provisional working title "Population, the Ultimate Non-renewable Resource". Edward also writes regularly for the demography blog Demography Matters. He also contributes to the Indian Economy blog . His personal weblog is Bonobo Land . Edward's website can be found at EdwardHugh.net. Edward follows in detail the Indian, Italian, Spanish, German and Japanese economies. He also has a more than a passing interest in the economies of Turkey and Brazil and in the emerging economies of Eastern Europe. |
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