Santiago. The Central Bank of Chile on Wednesday cut its range of projection of economic growth for 2019, despite an uptick in investment and inflation that would take time to return to the goal, which will require a greater monetary stimulus.
In the Monetary Policy Report (IPoM), the agency adjusted its calculation for the Gross Domestic Product (GDP) to an increase of between 2.25-2.75% in 2019, from the previous 2.75-3.5% .
Last year, the economy expanded by 4%.
The authorities expected a rebound in activity in the second half of the year and forecast a GDP expansion of around 3%.
"The Board estimates that the projection scenario for the activity is biased downwards and for inflation it is balanced," the entity said in the report.
In its presentation, the issuing institute projected inflation of 2.7% for this year, from the previous calculation of 2.8%.
"The Board estimates that the projection scenario for the activity is biased downwards and for inflation it is balanced," the entity said in the report.
"The maintenance of the dynamism of the investment and the expectation of higher growth rates in the second half will not be sufficient to reverse the widening of the activity gap that already occurred in the first half of the year," he added.
On Tuesday, the issuing institute cut the benchmark interest rate by 50 basis points to 2.0%, as expected by the market.
The agency assured that the effect of the greater monetary impulse will be manifested especially in 2020.
The document also noted that domestic demand will grow 2.4%, driven by investment and consumption, with increases of 4.0 and 2.7%, respectively.
Meanwhile, the price of copper, Chile's main export, would average US $ 2.7 per pound this year.
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