Not only did bitcoin break records in October, inflation in Chile too

Key facts:
  • Inflation for Chilean consumers reached 1.3%, a figure not recorded since 2008.

  • Although the Chilean economy is stable, bitcoin would have allowed savings to be multiplied.

The Consumer Price Index (CPI) of Chile showed an inflation of 1.3% during the month of October, which represents the highest figure of this measurement since 2008, when it advanced 1.5%. It is the second consecutive month in which it breaks this mark, since in September it was registered 1.2%.

While, annual inflation reported by the National Institute of Statistics (INE) already accumulates 5.8% in 2021. If the last 12 months are taken into account (that is, also counting November and December 2020), the figure reaches 6%, which exceeds a record in force since 2009. In January of that year, there was a rise of 6.3% in the same period.

According to what the Argentine media El Economista reports, this annual figure is located above the objectives set by the Chilean Central Bank for this year. The forecast was around 2% and 4%.

According to the INE, 7 of the 12 categories that make up the CPI basket had positive effects on the monthly variation of the index, four had negative effects and one had no effect. This means that Most of the items in the Chilean economy presented increases in their prices.

The economic activities that most increased their prices for Chilean consumers were transportation (3.9%) and recreation and culture (7.8%). It should be clarified that, in the case of transportation, it is an item that in turn affects the price of food. In the opposite direction, clothing and footwear registered a decrease of 3.3%.

Bitcoin as a refuge from inflation

As CriptoNoticias has recently reported, the stability that the Chilean economy has shown in recent years seems to be detrimental to the adoption of bitcoin (BTC). In other words, the greater the stability, the less interest in cryptocurrency.

Precisely, one of the engines of the acceptance of bitcoin in different countries of the region such as Argentina and Venezuela is the safeguard of value that it allows in comparison with local currencies, strongly depreciated in recent years. And it is not just “a regional evil”; even the United States is reaching its inflation peak in decades.

Nevertheless, Investing in bitcoin would have been a good idea for Chileans even in this not-so-hostile economic context. Of course, if we go back to 2009, when Satoshi Nakamoto had just published the bitcoin white paper and the first transactions were beginning to be made, the earnings today would have been millions of dollars.

However, a more “fair” comparison that considers only the last three years would also have similar results. For example, in November 2018 bitcoin was trading at roughly $ 6,400, according to data from CoinMarketCap. Currently, the cryptocurrency has just hit a new all-time high of more than $ 68,000. This means that, in just three years, an investor would have multiplied his funds by more than 10 times.

What caused this inflation in Chile?

Regarding the reasons that triggered this price increase, the cited source details that tax aid to families and pension funds that were delivered in advance have generated excessive liquidity in the economy, which translates into inflation.

According to what the Chilean Minister of Economy, Lucas Palacios, assured, there are other factors that may have had an influence. Among them, the official highlighted “the opening of the economy, external pressures and the rise in the exchange rate.”

In addition, This inflationary phenomenon could be related to the post-pandemic context that many countries of the world are going through. However, Chile had already shown signs of recovery (or, at least, stability) in 2020, with annual inflation of 3%. According to its Central Bank, the country’s economy grew 11.5% that year.

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Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Phone : +1 281-333-2229

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