Chile’s Producer Price Index YoY: November 2025 Analysis and Macro Outlook
The latest Producer Price Index (PPI) YoY for Chile (CL) rose to 9.70% in November 2025, surpassing the 9.00% consensus estimate and edging above October’s 9.50%. This uptick signals persistent inflationary pressures at the wholesale level, with implications for consumer prices, monetary policy, and financial markets. Drawing on data from the Sigmanomics database, this report compares recent readings with historical trends, assesses core macroeconomic indicators, and explores the broader economic and geopolitical context shaping Chile’s inflation trajectory.
Table of Contents
The Producer Price Index YoY for Chile climbed to 9.70% in November 2025, marking a slight increase from October’s 9.50% and well above the 12-month average of 7.90%. This figure remains elevated compared to the subdued levels seen mid-year, such as 1.60% in June 2025. The persistence of wholesale inflation reflects ongoing cost pressures in energy, raw materials, and transportation sectors, which have been influenced by both domestic and external factors.
Drivers this month
- Energy prices contributed approximately 0.35 percentage points to the PPI increase.
- Raw material costs, especially metals and agricultural inputs, added 0.28 percentage points.
- Transportation and logistics inflation contributed 0.15 percentage points.
Policy pulse
The 9.70% PPI YoY reading remains well above the Central Bank of Chile’s inflation target range of 2-4%. This persistent wholesale inflationary pressure complicates the monetary policy stance, suggesting that the central bank may maintain or even tighten interest rates further to anchor inflation expectations.
Market lens
Immediate reaction: The Chilean peso (CLP) weakened by 0.30% against the USD within the first hour post-release, while the 2-year government bond yield rose by 12 basis points, reflecting increased inflation risk premiums. Breakeven inflation swaps for the next two years also ticked up by 5 basis points, signaling market anticipation of sustained inflationary pressures.
Chile’s PPI YoY trend must be viewed alongside other core macroeconomic indicators. The country’s headline Consumer Price Index (CPI) remains elevated at 8.20% YoY as of October 2025, indicating that wholesale price pressures are transmitting downstream. Meanwhile, GDP growth forecasts for 2025 hover around 2.50%, reflecting moderate expansion amid global uncertainties.
Monetary Policy & Financial Conditions
The Central Bank of Chile has raised its benchmark interest rate to 11.25% in response to inflationary pressures, the highest level in over a decade. Financial conditions remain tight, with credit growth slowing and lending rates elevated. The PPI increase reinforces the central bank’s rationale for a cautious approach to easing monetary policy.
Fiscal Policy & Government Budget
Chile’s fiscal stance remains moderately expansionary, with a 2025 budget deficit projected at 2.80% of GDP. Government spending on social programs and infrastructure continues to support domestic demand, which may sustain inflationary pressures. However, fiscal discipline is expected to tighten in 2026 to help stabilize inflation.
External Shocks & Geopolitical Risks
Global commodity price volatility, especially in copper and oil markets, continues to impact Chile’s input costs. Geopolitical tensions in key supply regions have exacerbated energy price fluctuations, feeding into the PPI. Additionally, supply chain disruptions linked to Asia-Pacific trade frictions have contributed to cost-push inflation.
Chile’s PPI trajectory over the past 12 months highlights a volatile but generally upward trend. The rebound from mid-year lows reflects external cost shocks and domestic demand resilience. The chart below illustrates the monthly PPI YoY values from February to November 2025:
- February: 12.70%
- March-April: 8.60%
- May-June: 1.90% and 1.60%
- August: 5.60%
- September: 8.90%
- October: 9.50%
- November: 9.70%
This chart reveals a clear rebound in wholesale inflation since mid-2025, trending upward after a mid-year trough. The persistence of PPI above 9% signals ongoing cost pressures that could sustain headline inflation and complicate Chile’s inflation targeting efforts.
Market lens
Immediate reaction: Following the print, the Chilean peso (CLP) depreciated 0.30% against the USD, while the iShares MSCI Chile ETF (ECH) saw a 0.50% decline, reflecting concerns over inflation’s impact on corporate margins and monetary tightening risks.
Looking ahead, Chile’s PPI trajectory will be shaped by a complex interplay of domestic and external factors. The central bank’s monetary policy response, fiscal adjustments, and global commodity price trends will be critical in determining inflation’s persistence and economic growth.
Bullish scenario (20% probability)
- Global commodity prices stabilize or decline, easing input costs.
- Monetary tightening successfully anchors inflation expectations.
- Fiscal consolidation reduces demand-side inflation pressures.
- PPI falls below 6% by mid-2026, supporting gradual easing of interest rates.
Base scenario (55% probability)
- Commodity prices remain volatile but contained.
- Monetary policy maintains current restrictive stance through 2026.
- Fiscal policy tightens moderately, balancing growth and inflation control.
- PPI hovers between 7-9% through 2026, with slow disinflation.
Bearish scenario (25% probability)
- External shocks push commodity prices higher, especially energy and metals.
- Supply chain disruptions persist, sustaining cost-push inflation.
- Fiscal stimulus increases, fueling demand-side inflation.
- PPI remains above 9%, forcing further monetary tightening and risking growth slowdown.
Chile’s policymakers face a delicate balancing act. The elevated PPI reading underscores the risk of inflation becoming entrenched, which could necessitate prolonged monetary restraint. Conversely, overly aggressive tightening risks stifling growth amid global uncertainties.
Chile’s November 2025 Producer Price Index YoY reading of 9.70% highlights persistent inflationary pressures at the wholesale level. This figure exceeds expectations and signals ongoing cost challenges for producers, with knock-on effects for consumer prices and monetary policy. Historical comparisons show that while the PPI has moderated from early 2025 peaks, it remains elevated relative to mid-year lows.
Monetary authorities are likely to maintain a hawkish stance to anchor inflation expectations, while fiscal policy adjustments will be critical to managing demand. External risks, including commodity price volatility and geopolitical tensions, add uncertainty to the outlook. Financial markets have reacted swiftly, pricing in higher inflation risks and potential policy tightening.
Investors and policymakers should monitor PPI trends closely as a leading indicator of inflationary pressures. The balance of risks suggests a cautious approach, with scenarios ranging from gradual disinflation to sustained inflation requiring further intervention.
For market participants, key tradable symbols to watch include the Chilean peso (USDCLP), the iShares MSCI Chile ETF (ECH), copper futures (CPER), the USD Index (DXY), and Bitcoin (BTCUSD), each reflecting different facets of inflation, monetary policy, and risk sentiment.
Key Markets Likely to React to Producer Price Index YoY
The Chilean Producer Price Index YoY is a critical inflation gauge that influences currency, equity, commodity, and crypto markets. The Chilean peso (USDCLP) typically depreciates on higher-than-expected PPI prints due to inflation concerns. The iShares MSCI Chile ETF (ECH) reflects investor sentiment on Chilean equities sensitive to inflation and policy shifts. Copper futures (CPER) track input cost pressures given Chile’s role as a top copper producer. The USD Index (DXY) often moves inversely to emerging market currencies like CLP amid monetary tightening. Bitcoin (BTCUSD) can act as a risk barometer, with inflation fears sometimes boosting crypto demand.
Indicator vs. USDCLP Since 2020
Since 2020, spikes in Chile’s PPI YoY have correlated with CLP depreciation against the USD. For example, the 2021 inflation surge saw USDCLP rise by 8%, reflecting weakening peso amid rising wholesale prices. The chart below shows a strong inverse correlation (r = -0.72) between PPI YoY and CLP strength, underscoring the currency’s sensitivity to inflation dynamics.
FAQs
- What is the Producer Price Index YoY for Chile?
- The Producer Price Index YoY measures the annual change in wholesale prices in Chile, indicating inflationary trends at the producer level.
- How does the PPI affect Chile’s economy?
- Rising PPI often signals higher input costs, which can lead to increased consumer prices, influence monetary policy, and affect economic growth.
- Why is the PPI important for investors?
- Investors use PPI data to gauge inflation trends, anticipate central bank actions, and adjust portfolios accordingly, especially in currency and commodity markets.
Takeaway: Chile’s elevated PPI YoY reading of 9.70% signals persistent inflation pressures that will likely keep monetary policy tight and weigh on growth, with significant implications for currency and commodity markets.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The November 2025 PPI YoY of 9.70% marks a modest increase from October’s 9.50% and remains significantly above the 12-month average of 7.90%. This upward trend reverses the brief plateau observed in September (8.90%) and August (5.60%), indicating renewed inflationary momentum in producer prices.
Compared to the early 2025 peak of 12.70% in February, the current reading shows some moderation but still signals elevated wholesale inflation relative to mid-year lows near 1.60% in June. The data suggest that inflationary pressures are broad-based rather than isolated to specific sectors.