Chile Forum

Esperts forecasted a high IPC for the month of March.The increase will be around 1%.

This will be the highest registered for this month since 2003.
Being March, the start of the School year, normally brings the prices a little higher.

But this year a couple of more circumstances will make the increase even higher.

Normally the bulk of the increase is created in the education front.

Primarily the increase in the costs of registration and monthly school fees, added to transportation.

The past year , 2006, the increase went up to 0,6% and in 2007 the value was 0,4%.

Compounding the problem , is the fact that 2007 will close with an IPC around 7.8% or more,this inflation will be indexed to next year fees.

The cost of School supplies and transportation will suffer an increase mostly due because of higher fuel costs.

Other events, affecting the IPC on march are; the renewal of circulation permits, the Holy Week will happen in March this year, bringing an increase in the cost of travel.

Also , normally the salary increases are made quarterly in Chile, so there is the posibility that the companies will traspass this increase to the prices in March as well.

If March brings an IPC of 1% or more, this alone ,will create problems for the Banco Central.Economists foresee an 8% IPC for the year 2008 .

Meantime, the Encuesta de Expectativas Económicas del Banco Central ( Survey of Economic Expectations from Banco Central) puts the IPC for December in the 0.1% and the variation for January and February at 0% or negative.

From "La Tercera" of 12/10/07