January 8, 2020 / 11:56 AM / 15 days ago

Chile consumer prices up 0.1% in December, inflation reaches bank target

SANTIAGO (Reuters) - Chilean consumer prices rose 0.1% in December, the government’s statistics agency said on Wednesday, while annual inflation hit the central bank’s 3.0% target.

Statistics agency INE said the rise was caused by price increases in five of the 12 divisions that make up its basket of goods, including a 1.7% increase in transport costs - largely bus tickets and fuel - and 0.6% in living and basic services, including the price of gas.

Chile has been rocked by protests that started in October over an increase in public transport fares. They left 26 dead and caused billions in losses for private businesses and public infrastructure.

Demonstrations and sometimes violent riots and looting prompted the central bank to slash forecasts for growth, investment and demand through 2020.

Last month, the central bank said it would keep its key interest rate at 1.75% and would probably leave it there for several months, asserting that recently announced fiscal stimulus measures and a depreciating peso would help push long-lagging inflation to its target.

The bank boosted its year-end inflation forecast to 3.4%, from a previous 2.7 percent and chopped its estimate for growth in 2019 to 1% from a previous forecast of 2.25% to 2.75%.

Reporting by Aislinn Laing; Editing by Andrew Heavens

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