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UPDATE 1-Chile inflation uptick in November seen as temporary
December 7, 2016 / 12:25 PM / a year ago

UPDATE 1-Chile inflation uptick in November seen as temporary

(Recasts first paragraph, adds economist’s comments)

SANTIAGO, Dec 7 (Reuters) - Chile’s consumer price index rose slightly in November, according to data released on Wednesday, although the slight increase in inflation is seen as temporary and unlikely to modify expectations for the central bank to cut interest rates.

The CPI rose 0.1 percent in November, compared to a Reuters forecast for no change, as prices for housing, basic services and goods increased, the government’s INE statistics agency said.

Inflation in the 12 months to November was 2.9 percent, below the central bank’s 3 percent target.

“The small uptick in Chilean inflation in November is likely to prove temporary and we expect the headline rate to fall further below the central bank’s target by early next year,” said Adam Collins, Latin America economist at London-based Capital Economics.

Data showed earlier this week that Chile’s economy contracted for the first time in seven years in annual terms, as manufacturing and mining activity fell, boosting bets the central bank will cut interest rates to spur growth.

“Following more disappointing news on the economy, we now expect the central bank to cut interest rates to 3.0 percent next year, from 3.5 percent currently,” said Collins.

Core inflation was 0.2 percent in November, the INE reported. (Reporting by Anthony Esposito; Editing by Alden Bentley)

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