Chile: CPI inflation reached +0.1% MoM in June, in line with our expectations

Summary

June’s CPI increased 0.1% MoM, in line with our expectations but below market consensus. As expected, the figure was driven by increases in the prices of foodstuffs although partially compensated by apparels and housing. With this print, annual inflation decreased to 4.3%, still above the central bank’s target of 3%, while accumulated inflation in 2014 reached 2.5%. Core inflation measures remain subdued with increases of no more than 0.1% MoM. In this regard, we forecast July’s CPI inflation between 0.1/+0.2% MoM, once again with positive contributions from foodstuff, but also with increases in transportation and housing. Finally, with the information at hand, we expect a 25bp cut in the MPR to 3.75% at July’s monetary policy meeting.

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