Fynsa
Between cuecas, asados, earthquakes and tacos at all the exits in Santiago, a high variation in the CPI was a traditional September guest. The custom dictated that a monthly rise of 0.5% or 0.7% was normal, usually motivated by increases in the products most consumed by Chilean families during the holidays: meat, tomatoes, potatoes, onions, intercity bus tickets, etc. However, for some time now, we have seen a change with respect to this historical and almost traditional behavior.
For example, recently, the CPI for September 2025 increased 0.4% over the previous month, which was in line with market expectations, although slightly above ours (0.3%). Year-on-year, it went from 4.0% to 4.4%, which should not be a cause for concern as it is explained by a very low base of comparison. It should normalize in October.
During the month, although the greatest positive impact was contributed by Food, mainly due to increases in vegetables and bread, this was partially offset by declines in meat, something that has been repeated over the last two years. However, with a detail: meat starts to rise in August, falls in September and rises again in October. Draw your own conclusions. In second place was Recreation, sports and culture, while in third place was the Housing division.
An important part of the analysis would focus on the evolution of core inflation, especially after the concerns expressed by the Central Bank in its last Monetary Policy Report. Thus, although the CPI without volatility also increased 0.4% m/m, its services component showed a rise of only 0.2%, which would be welcomed by the Central Bank in view of the concerns generated by labor cost increases and their pass-through to consumer prices. On the other side of the coin, non-volatile goods rose 0.6%, although year-on-year they only increased from 3.1% to 3.2%.
While not decisive, the data could soften the neutral tone that the last monetary policy statement signaled for future TPM movements, opening the door to the possibility that a couple of cuts could be executed in late 2025 or early 2026.
For October, we expect a price variation of 0.4% depending on the evolution of food and the total impact of the cyber day, which should have opposite effects. All in all, this would push annual inflation to 3.8%, making September the last month of the cycle in which inflation was above 4.0%.
