By Chile’s inflation rate dropped to 4.1% in September 2024, down from the previous month’s nine-month high of 4.7%.
This marks a positive development for the country’s economy as key price declines in essential sectors like food and transportation have helped ease inflationary pressures.
The latest data, released by Chile’s National Institute of Statistics, signals a potential shift toward greater price stability, offering relief to both consumers and policymakers.
Monthly consumer price movement
In September, consumer prices rose by a modest 0.1%, a significant slowdown compared to August’s 0.3% increase.
This lower-than-expected growth suggests that Chile may be entering a period of more controlled inflation.
Economists had predicted a 0.3% rise for September, and the smaller increase raises hopes that inflationary pressures could continue to ease in the coming months.
However, external factors, such as global supply chain disruptions or commodity price fluctuations, could still affect this trend.
Key drivers of inflation decline
Several critical categories contributed to the overall reduction in inflation, offering financial relief to Chilean households:
- Food & Non-Alcoholic Beverages: Prices in this category fell by 0.5% in September, a notable reversal from the 0.5% increase in August. Given that food costs are a primary concern for many families, this decline reflects improvements in agricultural output and reduced global supply pressures. The drop is a welcome change for consumers, particularly those in lower-income households who are most affected by food price fluctuations.
- Alcoholic Beverages & Tobacco: This category saw a 0.4% decline in prices, following a 0.3% increase in August. Analysts attribute this reduction to a combination of changing consumer habits and potential tax or regulatory adjustments that have led to lower costs for alcohol and tobacco products.
- Transportation: Transportation costs also dropped by 0.3%, building on a 0.1% decline in August. The fall in transportation expenses is largely due to lower fuel prices and adjustments in public transport fares, both of which have made commuting and travel more affordable for Chilean consumers.
These price drops in essential goods and services significantly ease the financial burden on families, allowing for greater consumer spending and boosting overall economic stability.
Housing costs remain stable
While prices in some categories dropped, housing and utility costs remained steady in September, contrasting with a 0.3% increase the previous month.
Given that housing expenses constitute a large portion of household budgets, their stability provides a degree of reassurance for consumers.
In an uncertain economic climate, stable housing costs contribute to greater financial security for many families.
Core consumer prices see a rise
Despite the overall easing of inflation, core consumer prices—excluding the more volatile food and energy sectors—rose by 0.5% in September, up from a 0.2% increase in August.
This indicates that while prices in essential categories are stabilizing, non-essential goods and services are still experiencing upward price pressure.
Core inflation remains a concern for Chile’s central bank, which will need to carefully monitor these underlying inflationary forces.
The post Chile’s inflation eases to 4.1% in September: food, transport prices lead the decline appeared first on Invezz
