SANTIAGO – Chile’s gross domestic product will end the year with an expansion of 2.1 percent, the Central Bank said Monday as it dialed back the growth forecast for 2016.
The estimates are contained in the fourth and last Monetary Policy Report of 2015, which Central Bank president Rodrigo Vergara discussed at a hearing of the Senate Finance Committee.
The Central Bank reduced from 2.5-3.5 percent to 2-3 percent its projection for growth in 2016, mostly as a result of the global fall in commodity prices.
The deterioration is a “common phenomenon” among emerging and commodity-exporting economies, the bank said.
“The external outlook has deteriorated with worsening terms of trade, particularly in the price of copper (Chile’s chief export), slower growth among trading partners, and less favorable financial conditions,” Vergara said.
The bank expects the price of copper will end the year at $2.49 a pound, compared with a forecast of $2.55 in September, and will fall further next year to $2.20 a pound.
Third-quarter macroeconomic figures showed a larger than expected deterioration in the commodities sector as copper production was curtailed in line with the fall in prices, the report said.
The Central Bank expects inflation to be at 4.4 percent by the end of the year, the same rate as in 2014.