UPDATE 2-Chile inflation to slow in November - finance minister

Thu Nov 29, 2012 10:24am EST

Related Topics

* October consumer price index rise was 0.6 percent
    * 2012 inflation seen below central bank's 3 percent target
    * Central bank poll sees November CPI down 0.1 pct


    SANTIAGO, Nov 29 (Reuters) - Chile's inflation will slow in
November versus October's  stronger-than-expected 0.6 percent,
Finance Minister Felipe Larrain said on Thursday.
 
    World No.1 copper producer Chile's full-year inflation will
be under the central bank's policy horizon target of 3 percent
and likely closer to 2.5 percent, he added later during an
interview with TV channel CNN Chile.
    "What we've seen up until now has been mostly specific
(inflationary) pressures," Larrain said on the sidelines of a
business conference.
    "We always look at inflation, but I'm not significantly
worried about inflation. I don't see an explosion of
inflationary pressures," he added.
    Inflation in the 12 months to October reached 2.9 percent. 
    "We're going to end this year with inflation below the
central bank's 3 percent target and probably closer to 2.5
percent," Larrain said. 
 
       
    Two consecutive months of surprisingly high inflation
readings - the consumer prices index jumped 0.6
percent in October and 0.8 percent in September - led some in
the market to view the possibility of rate increases.
 
    Wednesday's central bank poll of traders saw the CPI falling
0.1 percent in November and for the first time in months
forecast the central bank key rate at 5.25 percent, compared
with the current 5 percent, in two years. 
    Rates have been kept on hold since a cut in
January largely because Chile has shown better-than-expected
resilience to slowing demand from top trade partner China and
fallout from the euro zone's crisis. 
    "Investment and consumption are boosting the Chilean
economy," Larrain said. 
    The INE statistics agency is due to release November's
inflation data on Dec. 7 at 8am local time (11am GMT).
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