Chilean CPI falls 0.5% on-month in April

Chilean Consumer Price Index (CPI) registered a negative monthly variation of 0.5% according to the information released today by the National Statistics Institute (INE). Analyst expected a decline of  0.2% for the last month 

In April, six of the twelve divisions that are included in the CPI basket experienced declines in their results. Among these were Transportation (-2.0%), with an incidence of -0.398 pp in the result of the index.  This item was affected by lower fuel costs as a result of a drop in international crude oil prices in April. 

Water, Electricity, Gas and other Fuels declined -1.5%, with an incidence of -0.203pp in the CPI. This reault was the consequence of the 9.4% fell in electricity rates during April. 

Meanwhile, Core CPI dropped 0.3% from the previous month. Year-on-year, the core CPI, which factors out volatile produce and fuel prices, rose 1.2% in April, the INE said in it's statement.

Among the divisions with a good performance was Health, with a positive result of 1.3%. 

The prices of tradable goods fell 0.9% from the previous month and 0.7% year-on-year, while those of nontradable goods remained unchanged from march and posted a 3.1% gain year-on-year in april, according to the official information.

Felipe Larrain, Minister of Finance, said this is a good new for the chileans. He explained this will produce an increase in the purchasing power of the citizens and a better performance of wages.

Analyzing this results, Inversiones Security reduces the annual CPI forecast for december from 2.5%-3% to 2%.