IPoM: Central Bank again lowers the projection of growth in the face of the commercial war | Economy

This Wednesday the Central Bank (BC) released the latest Monetary Policy Report (IPoM), corresponding to the month of September, which raises reduce the growth projection again before the instability of the economy at world level, marked by the commercial war.

In detail, the entity reduced the GDP at a range that fluctuates between 2.25% Y 2.75%.

Central Bank of Chile published Monetary Policy Report #IPoM September 2019 on its website https://t.co/SgAi6R2vQ4 pic.twitter.com/9mAjgXykWr

– Central Bank of Chile (@bcentralchile) September 4, 2019

“The risks for the timely convergence of inflation have increased to 3%. This, responding in important part to a deterioration of the external scenario, where trade tensions have increased global uncertainty, growth has slowed in different countries and trade volumes have stagnated, ”explained the BC.

The external impulse that Chile will receive in the remainder of the year and much of 2020 will be much lower than that considered in the June Report.

The second quarter – added the BC – activity and domestic demand grew “below expectations”.

"Although part of it was due to specific factors in some sectors, the lower advance in consumption, the lower dynamism of private wage employment and expectations of consumers and companies that have fallen back at the beginning of the year," the organization argued.

Considering the background, the BC also reduced the interest rate by 50 basis points, up to 2.0%.

That decision was adopted by the unanimity of its members, also based on the international economic scenario and in line with what the experts had recommended.

Projection

In the 2019-2021 period, “the accumulated growth of the activity will be lower than that projected in June,” the BC stressed.

In his report, he noted that In 2019, GDP will increase between 2.25% and 2.75% (2.75% to 3.5% in June); at 2020 will do between 2.75% and 3.75% (3% to 4% in June); and in the 2021 remains between 3% and 4%.

The foregoing considers higher annual growth rates in the second half of 2019 than, however, They will not be able to compensate for the low figures of the first half of the year.