Chile’s official statistics agency reported that the country’s Consumer Price Index fell by 0.4% in June 2025, the biggest monthly drop since December 2023.

This decrease was twice what experts expected and pushed the annual inflation rate down to 4.1%. Food and non-alcoholic drinks became 0.9% cheaper, while clothing and footwear prices dropped by 6.4%.

These changes helped drive the overall decline. Health costs, however, rose by 0.7%. Out of thirteen main spending categories, six saw prices fall, six went up, and one stayed the same.

In the first half of 2025, Chile’s total inflation reached 1.9%. The Central Bank’s target range for inflation is 2% to 4%, so the current rate is just above the upper limit.

Chile’s Cost of Living Declines: CPI Sees Steepest Drop Since 2023. (Photo Internet reproduction)

The Bank has kept interest rates steady at 5% for several months, but this sharp price drop could lead to a rate cut soon. This fall in prices means families can buy more with their money, especially when it comes to food and clothes.

For businesses, lower costs may help with planning and investment. Chile’s economy, which depends on global trends and copper exports, remains sensitive to changes in world markets.

The data from Chile’s National Institute of Statistics shows that inflation is slowing. The Central Bank’s response in the coming weeks will be important for everyone in Chile, as it could affect the cost of living and business decisions for the rest of the year.