SANTIAGO: Chile registered the inflation of 7.2 per cent in 2021, the highest level in 14 years, the INE statistics agency said on Friday.

For the month of December, the figure was a higher-than-expected 0.8 per cent, driven by higher prices for transport and food.

Annual inflation was far higher than the central bank’s target of 3 per cent, the level of the year before.

Price rises were fueled partly by increased public spending boosted by government grants amounting to some $3 billion to stimulate a pandemic-ravaged economy, and individual withdrawals from private pension funds totaling $50 billion.

The withdrawals, three in total, were approved by Congress in response to strong public pressure, a short-term poverty alleviation measure that will leave millions of Chileans with less money to retire on.

Chile’s central bank has already raised interest rates twice since October by 1.25 percentage points each time.

The government expects GDP to have expanded about 11.5 per cent in 2021 compared to a fall of 5.8 per cent in 2020.

Elsewhere in Latin America, inflation is at more than 10 per cent in economic giant Brazil, while in Argentina it is around 50 per cent.