According to Cooperativa, the Budget Directorate (Dipres, the Finance Ministry agency that prepares and oversees the fiscal budget) projects inflation of 3.8% at the end of 2026, while private analysts expect a figure close to 5.0%. The difference is keeping economists on alert.
The Budget Directorate's figure comes from its latest Public Finance Report. The Consumer Price Index (CPI, the indicator that measures how much the cost of a basket of goods and services changes) currently shows a change of 4.1% over twelve months.
To put this in perspective, the Central Bank's target is 3%. That means current inflation is already more than one percentage point above that target. If the market is right, the gap would widen instead of narrowing, as the official projection assumes.
Why such a large difference? The main risks are rising fuel prices and the rise in the dollar. Luis Eduardo Escobar, director of Fundación Chile 21, made this argument and ruled out a rapid return of prices to the target.
"Fuel prices will continue to be passed on to consumers in the coming months. The price of the dollar has increased significantly, and all these international prices are in dollars," the economist told Cooperativa.
Escobar added a fact that helps explain the effect on your wallet: Chile imports 60% of everything it consumes. When the dollar rises, it makes everything from gasoline to supermarket products and electronics more expensive, because many of those prices are set in foreign currency.
"Most likely, the CPI will exceed 4.5% between now and the end of the year, and we will not be able to return to 3% until 2028," he said. The outlet does not report any calculations by the Budget Directorate that address this difference.
The gap matters because official projections serve as the basis for estimating government revenue and spending. Higher inflation than expected also puts pressure on the Central Bank to keep interest rates high, which makes credit and loans more expensive.
The Monetary Policy Rate (MPR, the benchmark rate the Central Bank uses to make credit more or less expensive) currently stands at 4.5%. The Board's dilemma is to contain prices without further cooling economic activity.
The next Monetary Policy Meeting is scheduled for Monday, October 27, and Tuesday, October 28. At that meeting, the Central Bank Board will decide whether to keep the MPR at 4.5% or change it.
