Monetary Policy Report (IPoM)

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Monetary Policy Report September 2026

Informe de Política monetaria

The domestic economy has weakened over the course of the year, with domestic demand slowing during the second quarter. This occurred alongside a deterioration in labor market conditions, a decline in confidence indicators, and the negative effects of higher fuel prices on the income of firms and households. Thus, while the impact of supply-side factors predominated in GDP performance at the beginning of the year, its recent evolution has also reflected weak domestic spending. Inflation has followed a path consistent with the projections in the June Monetary Policy Report (IPoM), significantly influenced by fuel prices amid the conflict in the Middle East. Regarding the projections, the main changes in the central scenario are concentrated in the local economy. For 2026, the GDP growth outlook has been revised downward relative to June, from 1.0-1.75% to 0.25-0.75%, owing to the effects of weaker demand, the consequences of adverse weather conditions on several sectors during the current quarter, and lower mining production. Starting next year, the implementation of the Reconstruction Act is expected to provide additional support for economic activity, primarily through investment. The inflation forecast shows no significant changes, reflecting the combination of a cost shock that remains relevant and a weaker demand in the short term, although spending is expected to recover within the forecast horizon. Headline inflation is projected to reach levels around 3% in the second quarter of 2027. The Board estimates that it will need to continuously assess alternative scenarios in which the response of the global and domestic economies could lead to inflation trajectories different from those expected and could require changes in monetary policy. Accordingly, the future path of the Monetary Policy Rate (MPR) will be assessed on a meeting-by-meeting basis based on how events unfold.

Monetary Policy Report September 2026

What does this MP Report tell us?

Inflation remains above the 3% target, although it has evolved in line with expectations. It is still projected to converge to the target in the second quarter of 2027.

Inflation remains above the 3% target, although it has evolved in line with expectations. It is still projected to converge to the target in the second quarter of 2027.

The economy has weakened amid lower mining, agricultural, and fishing production; a deterioration in the labor market; and a decline in confidence indicators. The impact of recent storms has added to these developments.

The economy has weakened amid lower mining, agricultural, and fishing production; a deterioration in the labor market; and a decline in confidence indicators. The impact of recent storms has added to these developments.

Thus, this year’s growth projection has been revised downward compared with the previous report. However, the economy is expected to regain momentum in 2027.

Thus, this year’s growth projection has been revised downward compared with the previous report. However, the economy is expected to regain momentum in 2027.

The Central Bank will continue to monitor economic developments to ensure the fulfillment of its objective: maintaining low and stable inflation.

The Central Bank will continue to monitor economic developments to ensure the fulfillment of its objective: maintaining low and stable inflation.

Inflation remains above the 3% target, although it has evolved in line with expectations. It is still projected to converge to the target in the second quarter of 2027.

Inflation remains above the 3% target, although it has evolved in line with expectations. It is still projected to converge to the target in the second quarter of 2027.

  • Price variation, as measured by the Consumer Price Index (CPI), has fluctuated around 4% annually in recent months.
  • This has largely been driven by higher fuel prices.
  • Thus, the inflation forecast remains somewhat above 4% by the end of this year, reiterating that its convergence to the 3% target will take place in the second quarter of 2027.
The economy has weakened amid lower mining, agricultural, and fishing production; a deterioration in the labor market; and a decline in confidence indicators. The impact of recent storms has added to these developments.

The economy has weakened amid lower mining, agricultural, and fishing production; a deterioration in the labor market; and a decline in confidence indicators. The impact of recent storms has added to these developments.

  • In the second quarter, total GDP and non-mining GDP changed by -0.2% and 0.7%, respectively, both below the figures projected in June.
  • In July, the Monthly Index of Economic Activity (Imacec) declined by 1.5% year-on-year, largely influenced by lower mining production and the effects of the storms.
  • Chile’s labor market has remained weak since the pandemic, reflecting a combination of persistent and cyclical factors.
  • All of this has occurred in a context in which the conflict in the Middle East continues to dominate the external scenario, with an escalation of hostilities.
Thus, this year’s growth projection has been revised downward compared with the previous report. However, the economy is expected to regain momentum in 2027.

Thus, this year’s growth projection has been revised downward compared with the previous report. However, the economy is expected to regain momentum in 2027.

  • Lower economic activity in the first part of the year has led to an adjustment in the 2026 GDP growth range, from 1.0–1.75% to 0.25–0.75%.
  • Expected growth in both consumption and investment has also been revised downward for this year.
  • Economic activity is expected to return to higher growth rates beginning next year. Growth is projected at between 2% and 3% in 2027, and between 2.25% and 3.25% in 2028.
The Central Bank will continue to monitor economic developments to ensure the fulfillment of its objective: maintaining low and stable inflation.

The Central Bank will continue to monitor economic developments to ensure the fulfillment of its objective: maintaining low and stable inflation.

  • The macroeconomic scenario remains marked by risks on various fronts, including the conflict between the United States and Iran.
  • Thus, future changes in the Monetary Policy Rate (MPR) will continue to be assessed on a meeting-by-meeting basis, depending on how events unfold.
  • The Board reaffirms that it will take the necessary decisions to ensure that projected inflation stands at 3% over a two-year horizon.
Presentations
Presentación Informe de Política Monetaria Septiembre 2026, ante el Senado
Conferencia de Prensa en BCCh Informe de Política Monetaria Septiembre 2026
 
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