Low June CPI divides analysts on the start of interest rate hikes

The June CPI was up 0.1% from the previous month, surprising market forecasts that indicated an increase of 0.2%.

Inflation accumulates 2.5% in twelve months, approaching the target target of the Central Bank by 3% over a two-year horizon.

Of the twelve divisions that make up the CPI basket, the main contributor to the increase in the index was housing and basic services, with a monthly change of 0.7% and an incidence of 0.098 percentage points in the monthly change. Real rents increased by 0.6% and water and other supplies increased by 1.2%.

Transportation followed, also with a monthly change of 0.7% and an incidence of 0.092 points. and Food and non-alcoholic beverages, with a monthly increase of 0.4% and a 0.073 point contribution to the index.

Due to greater availability of citrus fruit, prices of oranges and lemons fell 25.8% in June and 35.5%, respectively, subtracting 0.105 percentage point from l & # 39; CPI. The monthly decline in package fares (-3.9%) and air travel (-7.0%) subtracted 0.054 points more than the overall index.

The IPCSAE (excluding food and energy) inflation trend, recorded a monthly increase of -0.1% accumulating in twelve months a variation of 1.9%, even below the British Columbia target range of between 2% and 4%. The inflation of tradable goods (imported products) did not vary and accumulated 2% in twelve months.

With different readings on price developments, the opinion of analysts is shared between those who bet on a rising interest rate policy (TPM) in the fourth quarter of this year. year and those who forecast it for the first months of 2019.

The negative CPI of 0.4% in June of last year is what explains that inflation in twelve The months will go from 2% in May to 2.5%, according to Valentina Rosselli, chief economist of Econsult, which forecasts the first rate hike for 2019.

According to Benchile Inversiones, beyond the specific surprises on some property and weak basis of comparison, inflation returns to 3% and continues to wait for an increase in the TPM in October.

As the exchange rate begins to fall between $ 615 and $ 620, BBVA Research expects market moves its expectations from October, around January-February 2019 the first rise in rate. The BCI reference scenario anticipates an increase in the MPR in October-December 2018.