Chile inflation surges to 1.9% in March, highest level since 1993

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Chile's President Gabriel Boric meets with foreign correspondents at La Moneda Palace in Santiago

By Fabian Cambero

SANTIAGO (Reuters) – Chile’s consumer prices rocketed 1.9% in March, the highest monthly rise in almost thirty years, underscoring the challenge for authorities as they battle spiraling inflation exacerbated by rising global commodities costs.

The Andean country’s official statistics agency said on Friday that the rise had been driven by food prices, non-alcoholic beverages and education.

The monthly figure was far higher than the 1.05% rise expected in a Reuters poll of economists and is the highest monthly inflation rate since 1993. The rolling 12-month rate rose further to around 9.4%, the highest since 2008.

That remains far above the central bank’s target rate of 2% to 4%, which has been driving a recent spate of interest rate hikes and may prompt more tightening ahead.

Governments around Latin America have been looking to combat inflation, which has been pushed higher by supply bottlenecks linked to the war in Ukraine. Brazil posted its highest monthly inflation in 28 years on Friday.

In Peru, facing its fastest inflation in a quarter of a century, rising prices are spurring angry protests that have rattled the government of leftist Pedro Castillo.

Chilean president Gabriel Boric announced a $3.7 billion economic recovery plan on Thursday that included a minimum wage hike to help people deal with rising prices.

The world’s no. 1 copper producing country has seen a rapid economic recovery from the COVID-19 pandemic aided by state spending and withdrawals from private retirement funds, which has in turn caused strong inflationary pressure.

To combat inflation, the central bank raised the interest rate by 150 basis points to 7% in March.


Chile inflation: 30-year high

Chile inflation: 30-year high (Interactive graphic)


(Reporting by Fabian Cambero, Natalia Ramos and Alexander Vilegas; Writing by Alexander Villegas; Editing by Frank Jack Daniel and Nick Zieminski)