Chile enters mid-2025 with the brakes on and the pressure building. The Central Bank has kept rates on hold for a third straight meeting as inflation proves stickier to shift than had been hoped and the peso loses a bit of steam. Growth is slowing, the labour market remains patchy and the reform agenda is inching forward - but is still far from secure. Politically the mood is changing quickly. With general elections now in sight and Boric on the way out, policy risks are creeping up. Under the surface the system still looks solid - but resilience is being tested and the margin for complacency is shrinking.
Monetary Policy.
No change in rates - and no change in tone. The Central Bank held steady at 5.00% in April, extending the pause that began in January. Inflation remains the sticking point: headline Consumer Price Index came in at 4.5% year on year in April, down from 4.9% in March but stubbornly still above the 2 to 4% target band. The Bank continues to signal caution, yet it has fa...
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