Chile’s inflation rate hit 7.2 per cent in 2021, the highest since 2007, when it rose to 7.8 per cent, the National Statistics Institute (INE) said.
Last year’s rate was far beyond the 2.97 per cent inflation seen in 2020, and well above expectations, the INE said, noting the Consumer Price Index (CPI) rose 0.8 per cent in December compared to the previous month, reports Xinhua news agency.
Economy Minister Lucas Palacios said via Twitter that while inflation affected everyone, it hit “those who have fewer resources” the hardest.
“That’s why the 0.8 per cent rise in the CPI in December, well above market expectations (of 0.5 per cent), represents a double concern,” said Palacios.
Last year’s inflation rate was also well above the Central Bank’s target rate of 3 per cent, “that’s why the Central Bank has been raising interest rates in recent months, and continuing to do so has not been ruled out”, he said.
“Local and global factors explain this rise, but the former dominate. The increase in the exchange rate due to political and economic uncertainty, and the high liquidity due to withdrawals from pension funds, are the main factors explaining 2021’s high inflation,” Palacios said.