Chile’s headline inflation seems to have remained unchanged in October

Chile’s consumer price inflation is expected to have stayed the same in October. The country’s inflation reached near target in September after dropping below the target ceiling in the prior month. According to a Societe Generale research note, the headline inflation is expected to have remained unchanged at 3.1 percent year-on-year and 0.4 percent sequentially in October.

Meanwhile, core inflation has been falling throughout 2016 on a year-on-year basis. But on a sequential basis, core inflation is likely to have accelerated to 0.2 percent sequentially in October from -0.1 percent month-on-month in September, added Societe Generale.

In all, inflation has remained on a downward path, thanks to the weak demand growth, stabilizing peso and ongoing wage moderation. If all these factors continue to be in play in the future, inflation in Chile is expected to further slow down. But, given the larger-than-anticipated deceleration in inflation in the third quarter, there is a significant near-to-medium term risk on the downside to the inflation projection, stated Societe Generale.