Monetary Policy Report (IPoM)

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Monetary Policy Report June 2026

Informe de Política monetaria

As expected, headline inflation has risen rapidly, driven by the significant cost shock resulting from the conflict in the Middle East. Meanwhile, during the first quarter, domestic demand evolved in line with forecasts, while economic activity surprised negatively, largely associated with the performance of sectors linked to natural resources. On the external front, the rise in oil prices caused an increase in inflation in several economies. Global activity remains resilient, partly supported by technology breakthroughs, which have sustained favorable financial conditions. In this context, projections for the 2026–2028 period are made limited adjustments. The GDP growth forecast for 2026 is reduced, mainly due to incoming first-quarter figures. In contrast, a higher growth range is anticipated for 2027, driven in part by stronger investment momentum. Regarding domestic demand, no significant revisions are observed on aggregate, although changes in its composition are considered, mostly this year. In particular, public spending is projected to gain momentum, while household consumption is expected to lose traction, as its underlying fundamentals have weakened. Investment forecasts for this year have also been revised downward, because of lower-than-expected actual figures; however, the medium-term outlook has improved. Forecasts for inflation continue to assume that the annual change in the CPI will resume levels around 3% during the second quarter of 2027. The Board estimates that the balance of risks to inflation has been shifting gradually toward equilibrium, although the macroeconomic outlook remains subject to a higher-than-usual degree of uncertainty. 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 June 2026

What does this MP Report tell us?

Inflation rose rapidly in recent months, as predicted in the March Report, due to rising production costs caused by the conflict in the Middle East.

Inflation rose rapidly in recent months, as predicted in the March Report, due to rising production costs caused by the conflict in the Middle East.

According to the Central Bank’s forecasts, inflation will return to the 3% target during the second quarter of 2027.

According to the Central Bank’s forecasts, inflation will return to the 3% target during the second quarter of 2027.

The Chilean economy has grown less than expected this year. Stronger growth is expected by 2027.

The Chilean economy has grown less than expected this year. Stronger growth is expected by 2027.

The Central Bank will continue to monitor the evolution of the economy, to ensure that it meets its objective of keeping inflation low and stable.

The Central Bank will continue to monitor the evolution of the economy, to ensure that it meets its objective of keeping inflation low and stable.

Inflation rose rapidly in recent months, as predicted in the March Report, due to rising production costs caused by the conflict in the Middle East.

Inflation rose rapidly in recent months, as predicted in the March Report, due to rising production costs caused by the conflict in the Middle East.

  • The annual change in prices (CPI) rose to 3.9% in May, primarily due to higher fuel prices.
  • However, when food and energy prices (such as fuel) are excluded, inflation stands around the 3% target.
  • In any case, there are risks because the oil price shock was significant, and we must continue to assess how the economy is absorbing it.
According to the Central Bank’s forecasts, inflation will return to the 3% target during the second quarter of 2027.

According to the Central Bank’s forecasts, inflation will return to the 3% target during the second quarter of 2027.

  • In the short term, the monthly CPI should reflect the decline in oil prices, without ruling out even negative figures in some months.
  • As in the March report, we estimate that Chilean inflation will return to levels around 3% in the second quarter of next year.
  • Even so, inflationary risks remain significant, and we must continue to monitor prices closely.
The Chilean economy has grown less than expected this year. Stronger growth is expected by 2027.

The Chilean economy has grown less than expected this year. Stronger growth is expected by 2027.

  • The weak economic performance in the first quarter of the year owed largely to the slower performance of sectors related to natural resources, such as mining, agriculture, and fishing.
  • Accordingly, the projected growth range for the Chilean economy this year is 1%-1.75%, slightly lower than the March estimate.
  • However, the projected range for 2027 has been raised with respect to the previous report, to 2%-3%, driven by improved investment outlook.
The Central Bank will continue to monitor the evolution of the economy, to ensure that it meets its objective of keeping inflation low and stable.

The Central Bank will continue to monitor the evolution of the economy, to ensure that it meets its objective of keeping inflation low and stable.

  • The evolution of the economic scenario remains highly uncertain, so the risks to the economy are significant.
  • It is important to continue monitoring developments in global oil supply and its impact on the costs of production inputs.
  • The Central Bank’s Board will take every measure necessary to ensure that inflation reaches the 3% target within the policy horizon.
Presentaciones
Presentación Informe de Política Monetaria Junio 2026, ante la Comisión de Hacienda
Conferencia de Prensa en BCCh Informe de Política Monetaria Junio 2026
 
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