Chile: January’s CPI increased 0.1% MoM, above market consensus

CPI increased +0.1% MoM in January 2015 (+4.5% YoY), above both our expectations and those of the market (at -0.3% MoM). Core inflation measures rose by 0.6% MoM, but with tradables declining by 0.3% MoM – mainly fuels. Surprisingly, the print was driven by positive contributions from foodstuff, health division and cigarettes, partially compensated by transportation. Higher diffusion of prices was observed, with 60% of the basket showing small price increases as consequences of second round effects of past inflation and others related to the tax reform. All in all, no changes are expected for policy rates in February; although we estimate further easing of at least 50bp during 2Q15.

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