Chile's economy grew more slowly than expected in September and inflation eased last month, according to reports on Monday that should take pressure off Chile's central bank to raise its interest rates.
Chile's consumer price index rose 0.3 percent in October, down sharply from the 1.1 percent increase in each of the three previous months and well under the median forecast of 0.7 percent, given in a Reuters poll of eight economists.
"Nobody was expecting that figure, with the fall in transport and health (costs). This changes expectations, even though the 12-month trend is still high," said Pedro Tuesta, an economist with 4Cast in New York. The rise put 12-month inflation at 6.5 percent through October.
The biggest gains in the month were in housing and food prices, which were offset by sharp declines in prices for transportation and health care. Core inflation, which excludes prices for fresh produce and fuels, rose 0.2 percent in October and 5.1 percent in the 12-month period.
The good news on inflation was offset by disappointing growth data. Chile's economic activity index, the IMACEC, rose a 2.8 percent in September compared with a year earlier, below the 4.0 percent median forecast given in the Reuters poll.
"September growth confirms that third-quarter performance was hit by energy and (a slowdown in) industry," Tuesta said. "I expect a slight rebound in the fourth quarter." Last week the government reported that September's industrial output grew 1.3 percent year-on-year, the weakest monthly figure this year, affected in part by higher energy costs due to reduced natural gas supplies from Argentina.
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