The Central Bank of Chile kept its policy rate unchanged at 4.5% in a unanimous decision in March, citing a sharp increase in uncertainty over the global economic outlook following the war in the Middle East. The board noted that the initial boost from external conditions earlier in the year has been offset by a rise in oil prices to around $100 per barrel and tighter global financial conditions. At the same time, copper prices have retreated from recent highs, although they remain above the levels projected in previous IPoM reports.
On the domestic front, economic activity closed 2025 with growth of 2.5%. However, January’s Imacec reading came in weaker than expected, largely due to supply-side disruptions in the mining and agribusiness sectors, while private consumption and investment continued to show dynamism. The labour market showed little overall change, with the unemployment rate broadly stable and job creation still limited.
Inflation continued to ease, with headline inflation at 2.4% and core inflation at 3.3% in February. Nonetheless, short-term inflation expectations have risen noticeably, mainly reflecting higher fuel prices.
