Chile

Chile’s consumer prices rose more than forecast in July, supporting the central bank’s decision to hold its interest steady last week, interrupting a year of aggressive monetary easing amid risks including higher energy costs, Bloomberg News reported. Prices increased 0.7% from June, more than the 0.6% median estimate from analysts in a Bloomberg survey. The annual inflation rate ticked up to 4.6% in the chained series, the National Statistics Institute reported on Thursday.

Chile’s central bank kept its key interest rate unchanged, surprising most economists by pausing its yearlong easing cycle as inflation pressures increase, while indicating that the halt was likely to be temporary, Bloomberg News reported. Policymakers voted unanimously to hold borrowing costs at 5.75% on Wednesday, as expected by just four of 20 analysts in a Bloomberg survey. The other 16 forecast a quarter-point cut. Central bankers led by Rosanna Costa interrupted an easing cycle that has shaved 550 basis points from rates in just over a year.

A group of Latam Airlines Group SA shareholders raised $456 million in an initial public offering of American depositary shares, Bloomberg News reported. The shareholders in the Santiago-based airline sold 19 million ADS on Tuesday for $24 each, according to a statement. Each ADS represents 2,000 of Latam’s common shares, which trade on the Chilean Stock Exchange. The sellers are Sixth Street Partners, Strategic Value Partners, Olympus Peak, Monarch Funds, Värde Funds and Marathon Fund, the statement shows.

Investors in Chile are bracing for a rare flood of commercial buildings to hit the market as two of the nation’s largest real estate investment funds near liquidation, Bloomberg News reported. Real estate portfolios worth $552 million held in funds managed by heavyweights Toesca SA and Banchile Inversiones could soon go on sale due to recent shareholder votes. That’s raising fears of a looming vicious cycle in Chile. Low prices prompted investors to give up and liquidate real estate investments, but the upcoming sudden supply of buildings could push prices down even further.

Chile’s economic activity fell for the second straight month on declines in mining and commerce, adding to evidence that the jump in growth at the start of the year was short-lived, Bloomberg News reported. The Imacec index, a proxy for gross domestic product, fell 0.3% in April from the prior month, less than the -0.6% median forecast in a Bloomberg survey. From a year ago, activity gained 3.5%, the central bank reported on Monday. Chile’s economy is slowing down this quarter after gross domestic product jumped by the most since 2021 at the start of the year.

Chile’s economy recorded the fastest quarterly growth since 2021, when government stimulus fueled domestic demand during the pandemic, as both mining output and consumption increased while slowing inflation and falling interest rates provided much-needed relief, Bloomberg News reported. Gross domestic product rose 1.9% in the first quarter compared with the prior three months, a tad less than the 2% median forecast from analysts in a Bloomberg survey. From a year ago, the economy expanded 2.3%, the central bank reported on Monday.

Chile’s consumer prices rose more than forecast last month, underscoring the central bank’s caution over further interest rate cuts after it spearheaded reductions in Latin American over the past year, Bloomberg News reported. Prices increased 0.5% from March, above the 0.4% median estimate from analysts in a Bloomberg survey. The annual inflation rate rose to 4% from 3.7% in the chained series, the national statistics institute reported Wednesday.

Chile's central bank said in a report on Tuesday that the economy is broadly recovering, though some sectors have lagged and financial market depth has not yet returned to levels seen before the coronavirus pandemic, Reuters reported. The bank pointed to the South American country's commercial, construction and real estate sectors as having fallen behind, which it said had elevated the possibility of defaults. "The external scenario continues to be the main source of risks for local financial stability," according to the bank.