Chilean market analysts projected a 0.5 percent drop in the local economy by the end of 2023, improving their forecasts with respect to the 0.8 percent contraction estimated in the previous month’s survey, the Central Bank of Chile informed yesterday Tuesday.
Economists consulted by the central entity in the April Economic Expectations Survey (EEE) also forecast that the South American country’s economy will grow 1.9 percent in 2024, lower than the 2.1 percent expansion published in the last survey.
The specialists also pointed out that inflation in Chile will have a variation of 0.4 percent this month, the exact figure as of May, and that consumer prices will increase by 4.5 percent by the end of the year to reach the target range established by the Central Bank of 3 percent in 2024, with which they anticipated a deceleration of inflation.
The monetary policy rate, a tool used to halt inflation by cutting economic stimulus, is expected to remain at 11.25 percent and decrease to 10 percent within five months when inflation declines.
This month’s EEE projected that the monetary policy rate would reach 8.5 percent next December.
The Central Bank of Chile decided last week to maintain the monetary policy rate at the same level after it rose from 10.75 to 11.25 percent in October, its highest level since 1998, to contain the rise in prices amid the global economic crisis.
The regulator argued that externally, global financial markets had shown significant fluctuations, while locally, the economy has adjusted more slowly than expected, delaying the deceleration of inflation.
Chile closed 2022 with an inflation of 12.8 percent, crossing the barrier of the last decades. However, the government predicted that this year it would decrease.