The central bank has been holding its benchmark rate at 11.25% since October of last year as it tries to rein in the stubbornly high inflation resulting from rapid post-pandemic economic recovery. Analysts and traders say the bank is likely to vote to hold the rate again at a monetary policy meeting Friday, with cuts likely to come in the second half of the year. Copper price estimates for the world's top producer also raised to an average of $3.85 per pound, up from a previous forecast of $3.74 a pound. Wednesday's report also forecast domestic demand falling 3.5% year-over-year in 2023, compared to a previous estimate of a 3.7% drop. (Reporting by Natalia Ramos; Writing by Brendan O'Boyle; Editing by Rosalba O'Brien and Angus MacSwan)
(Updates with quotes from finance minister)
SANTIAGO, May 10 (Reuters) - The Chilean government on
Wednesday forecast annual growth for the economy this year at
0.3%, reversing a previous estimate of a 0.7% contraction.
"These numbers are somewhat positive. It's not a radical
change but it's good to start seeing numbers in the green,"
Finance Minister Mario Marcel said in a presentation in
Congress.
Economic data from the first quarter supports the revised
estimate, Marcel added, as the country's economic activity
showed signs of approaching 1% growth in the first quarter
compared to the fourth quarter.
"So even if the economy stagnates from here on out, we'll
still see at least 0.3% growth," he said, adding the government
"expects there will be more robust growth in the second half of
the year."
The government also adjusted its forecast for annual
inflation in 2023 upward to 7.9% from a previous estimate of
7.3%.
Annual inflation dropped below 10% in April, reaching its
lowest level in over a year but still far above the central
bank's target range of 2% to 4%.
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