"Headline inflation rate likely will continue to fall
over the next three-to-six months... (and) we think that
policymakers will soften their tone soon, once core inflation
starts to fall again," he added.
(Reporting by Gabriel Araujo and Fabian Andres Cambero; Editing
by Andrew Heavens, Barbara Lewis and Chizu Nomiyama)
(Adds price details in 6th paragraph, economists' comments in
4th, 7th and 8th paragraphs)
SANTIAGO, March 8 (Reuters) - Chile's consumer prices
unexpectedly fell in February, government statistics agency INE
said on Wednesday, offering much-needed relief as the country
battles inflation.
Prices dropped 0.1% last month, after an 0.8% rise in
January, below an expected 0.25% rise in a Reuters poll of
economists and taking 12-month inflation to 11.9%, down from
12.3% in January.
That is far from the central bank's target range of 2% to
4%, but a positive sign as both the central bank and private
economists forecast annual inflation to return to single-digit
territory during the second quarter.
"Inflationary moderation predictably continued in Chile,"
said Aldo Lema, a Grupo Security economist who is also a member
of the country's Autonomous Fiscal Council. "The negative CPI
reflected both the fall in volatile prices and the moderation of
core inflation indicators".
The Andean country, the world's largest copper producer, is
expected to hold benchmark interest rates at 11.25% in April,
then begin an easing cycle in May, a poll of traders released
last month found.
Rosanna Costa, the central bank chief, said earlier this
week that getting local inflation back to the target was "not
simple," but that the authority would make "decisions that are
coherent with the macro scenario".
Three of the 12 groups surveyed saw prices drop in February,
INE said in a statement, with transportation costs leading the
way with a 2.7% fall. Food and non-alcoholic beverage prices
dropped 0.3% while leisure costs shed 1%, it added.
Andres Abadia, Pantheon Macroeconomics' chief Latin
America economist, said the figures showed disinflation in Chile
was finally gathering speed thanks to favorable base effects and
the lagged impact of elevated interest rates.
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