Monetary Policy Report
Monetary Policy Report (IPoM)
Monetary Policy Report December 2025
Headline inflation fell faster than projected in September, in a global and local economic environment that was somewhat better than expected. In the central scenario of this Monetary Policy Report (IPoM), inflation would reach the 3% target in the first quarter of 2026. This considers a more favorable performance from some cost factors, in a context where risks to inflation convergence have diminished. Overall, local activity has been in line with expectations, with more dynamic investment in machinery and equipment. Internationally, the external boost is somewhat stronger for Chile. Global activity has been resilient to the uncertainty shocks at the beginning of the year, and financial conditions have improved. The rise in the price of copper has positively impacted the terms of trade. Nevertheless, global risks remain significant. The Board will evaluate the future movements of the Monetary Policy Rate (MPR) by considering the evolution of the macroeconomic scenario and its implications for the convergence of inflation.
What does this MP Report tell us?
If our projections materialize, inflation (the overall price level increase) will reach the 3% target in the first quarter of 2026.
The Chilean economy has continued to grow, driven mainly by dynamic investment.
The international scenario has improved, but significant risks remain that could affect our economy.
The BCCh will closely monitor the evolution of the global and domestic economy to make sure that inflation remains low and stable.
If our projections materialize, inflation (the overall price level increase) will reach the 3% target in the first quarter of 2026.
- The CPI, the indicator that measures changes in the prices of goods and services, has fallen faster than anticipated in the September IPoM, from 4% in August to 3.4% in November.
- Why has this occurred? It is mainly explained by a more favorable evolution of some factors that influence prices, such as the reduction in the exchange rate.
- Accordingly, it is projected to reach the 3% target during the first quarter of 2026.
The Chilean economy has continued to grow, driven mainly by dynamic investment.
- Chile’s economic activity has performed in line with expectations.
- In demand, the dynamism of machinery & equipment investment, influenced by large-scale projects in mining and energy.
- This IPoM shows a new revision upward of investment, especially this and next year.
- As described in the December IPoM, the Chilean economy is expected to grow by 2.4% this year and between 2% and 3% in 2026.
The international scenario has improved, but significant risks remain that could affect our economy.
- The global economy's expected contribution to Chile's growth is slightly higher than estimated a few months ago. Among other factors, because global growth has improved and the copper price has risen.
- However, there are still significant risks and, if they materialize, they will negatively affect the global economy and our own.
- One of these risks is associated with the impact of new technologies—such as artificial intelligence—on the value of the firms that produce them and on the overall economy, as this value could fall short of estimates.
- Meanwhile, there are also concerns about the deteriorating fiscal situation in several developed countries, which have increased their deficits and debt levels.
- Here are also concerns about the effects of the tariff increases imposed by the United States and the reactions of other countries.
The BCCh will closely monitor the evolution of the global and domestic economy to make sure that inflation remains low and stable.
- At its December monetary policy meeting, the Central Bank Board decided to lower the MPR again, bringing it to 4.5%.
- The Board will evaluate future MPR movements considering the evolution of the economy its implications for keeping inflation low and stable.
Presentations
Presentación Informe de Política Monetaria Diciembre 2025, ante el Senado
- Presentación de Rosanna Costa, Presidenta, ante el Senado
- Presentación de Rosanna Costa, Presidenta (Icare)
- Presentación de Stephany Griffith-Jones, Vicepresidenta (UAI)
- Presentación de Claudio Soto, Consejero del Banco Central de Chile (Confederación de Sindicatos Bancarios y del Sistema Financiero)