UPDATE 2-Chilean inflation at 12-year high, but seen slowing
April 3rd, 2008 | by admin |(Adds analyst quotes, details)
By Antonio de la Jara and Lisa Yulkowski
SANTIAGO, April 3 (Reuters) - Chile’s consumer inflationhit a 12-year high in March due to soaring food and educationcosts, data showed on Thursday, but prices rose less thanfeared which could remove the need for higher interest rates.
The consumer price index rose 0.8 percent in March,accelerating from a 0.4 percent rise in February, the NationalStatistics Institute (INE) said on Thursday. The result wasbelow the 1.2 percent median forecast of eight analysts andeconomists polled by Reuters, and raised hopes that the centralbank would hold its benchmark interest rate steady at itsmeeting next week.
The March figure pushed 12-month inflation to 8.5 percent,picking up speed from the 8.1 percent rate reported throughFebruary.
Even though the 12-month rate was the highest level in morethan 12 years, it reinforced local views that the bank wouldnot hike interest rates due to the strong depreciation of thedollar against the peso and lower forecast inflation in comingmonths.
“We estimate full-year inflation this year at 4.3 percent,”said Rodrigo Ibanez, an economist with the Banchile brokeragein Santiago.
“In April, we expect lower inflation because of the tax cutmeasure for fuels. This together with the depreciation of thedollar will mean the central bank will maintain rates at itsnext meeting.”
Last week the government imposed a cut in fuel taxes aspart of an economic stimulus package and to soften spikinginflation.
