This matched the median analyst forecast and marked a slowdown in the annual rate to 3.5%, according to data released by Chile’s national statistics agency. The central bank, led by Rosanna Costa, has left interest rates unchanged at 4.5% amid a delicate balance between inflation and economic weakness.
Energy costs dropped sharply in early July, with Enap, the state oil company, reporting that gasoline prices fell by 100 pesos ($0.11) per liter and diesel by 150 pesos per liter. This reduced transport prices by 3.5% compared to June, with energy prices down 3%. Despite these declines, core inflation remains slightly above the central bank’s 3% target, reflecting ongoing cost pressures in food and beverages, which rose 0.7% during the month.
The central bank cited in its July 28 meeting minutes that rising uncertainty—particularly from continued Middle East tensions—could threaten oil price stability. Domestically, however, weak investment and declining consumer confidence have softened inflationary momentum.
The broader economy remains in a tug-of-war: low inflation is being held back by high unemployment and weak economic activity, while policymakers continue to monitor external risks. Consumer expectations have worsened since the start of the year, and the central bank will keep borrowing costs steady until signs of stronger inflation return.