Chile

Chilean consumer prices rose more than three times as fast as analysts expected in November, surprising investors ahead of the central bank’s final monetary policy meeting of the year. Swap rates and the peso soared in response, Bloomberg News reported. Prices climbed 0.7% in the month, above the 0.2% median estimate of analysts surveyed by Bloomberg. While annual inflation slowed to 4.8%, it also exceeded the 4.2% forecast, the national statistics institute reported Thursday. Chile’s central bank targets cost-of-living increases at 3%.

A Chilean wind farm operator backed by Latin American Power has filed for bankruptcy in the U.S. with a restructuring deal that would provide financial relief from a debt default due to increased competition and severe drought, WSJ Pro Bankruptcy reported. Santiago-based Inversiones Latin America Power filed for chapter 11 Thursday in the U.S. Bankruptcy Court in Manhattan, with more than $400 million of debt.

Chilean economic activity registered the biggest monthly gain since January as the mining sector recovered and policymakers continued to lower borrowing costs, Bloomberg News reported. Activity rose 0.6% in September from the previous month, according to the central bank’s Imacec index, a proxy for gross domestic product. That compares with the 0.2% median estimate from analysts in a Bloomberg survey. The index was unchanged from the prior year, the bank reported Thursday.

Chile’s finance minister played down the impact of one of the world’s worst currency routs on inflation, saying the short-term peso weakness is unlikely to divert the central bank’s plans to cut interest rates, Bloomberg News reported. The currency slump stems from global economic factors such as the appreciation of the dollar as the Federal Reserve turns more hawkish, meaning any pressure on domestic prices will be relatively small, Mario Marcel said in an interview from the International Monetary Fund’s annual meeting in Morocco.

Chilean President Gabriel Boric embarks on his first trip to China with an ambitious agenda that seeks deals to make the country’s economy more efficient and help it develop beyond its traditional commodities exporter role, Bloomberg News reported. “We want to move toward a new stage that includes investments in the country that help us improve productivity,” Chile International Economic Relations Undersecretary Claudia Sanhueza said in an interview ahead of Boric’s first trip to the Asian country next week.

Chile’s economic activity posted its biggest monthly drop since May as services declined, pushing one of Latin America’s richest nations toward recession and paving the way for more big interest rate cuts, Bloomberg News reported. The Imacec index, a proxy for gross domestic product, fell 0.5% in August from July, compared to the median estimate for a 0.2% gain from analysts in a Bloomberg survey. It matched the 0.5% decline recorded in May. From a year prior, the index dropped 0.9%, the central bank reported on Monday.

Chile’s finance minister said the job of stabilizing the nation’s economy following a period of high inflation and overheated expansion is nearly complete as consumer price pressures wane, Bloomberg News reported. The annual inflation rate is about third of what it was a year ago and will continue declining to 4% in December, Mario Marcel said Wednesday in a Bloomberg Television interview from London, where he is meeting business executives as part of the Chile Day investors event. That consumer price level would be just above the central bank’s 3% target.

Chile's central bank on Wednesday lowered the top end of its estimate for the country's economic performance in 2023, saying it now forecasts gross domestic product (GDP) to show no growth in the most optimistic scenario, Reuters reported. The monetary authority previously expected an economic expansion of as much as 0.25% this year. It maintained the lower end of its GDP forecast at a contraction of 0.5%. The lowered estimate accounts for the impact of operational issues that have hit mining production in Chile, the world's largest copper producer, in recent months, the central bank said.

Chile’s central bank sees its policy outlook largely unchanged by a drop in the peso and the potential inflation impact from recent devastating floods, the institution’s vice president said in an interview, Bloomberg News reported. Chile’s monetary easing, combined with doubts over the Chinese economy that’s a key buyer of the country’s commodities and hawkishness of the Federal Reserve have weighed on the currency, Pablo Garcia said from Jackson Hole, where central bankers gathered for a global symposium hosted by the Fed.

Chile’s economy shank less than forecast in the second quarter as growth in the mining industry softened the blow from a prolonged retail slump on the eve of interest rate cuts, Bloomberg News reported. Gross domestic product fell 0.3% in the April-June period from the prior three months, less than the -0.6% median forecast of analysts in a Bloomberg survey. From a year ago, the economy dropped 1.1%, the central bank reported Friday. Meanwhile, GDP growth in the first quarter was revised to 0.4%, half of the original 0.8% increase.