Chile Lowers Economic Growth Forecast to 2.6% for 2024

On Wednesday, the Ministry of Finance announced that Chile revised its economic growth forecast for 2024, lowering it from 2.7% to 2.6%.

Additionally, they adjusted the inflation rate projection for the end of the year to 3.7%. This new estimate is slightly lower than the previous one.

Finance Minister Mario Marcel presented the Second Quarter Public Finance Report for 2024 to the Chilean Parliament.

Key officials from the Ministry of Finance joined him during this presentation. Macroeconomic Coordinator Andrés Sansone elaborated that the economy would see a slight contraction in the second quarter. However, it is expected to rebound in the third quarter.

Sansone explained that the revision was necessary due to weaker-than-expected performance in non-mining sectors during the second quarter. Consequently, the non-mining GDP projection has been revised downward.

The report also adjusted the 2025 growth forecast, increasing it by one-tenth of a percentage point to 2.6%.

On the topic of inflation, the government now projects a rate of 3.7% for 2024, down by one-tenth from the previous forecast.

However, for 2025, the average annual inflation rate is expected to rise from 3.4% to 4.4%.

Minister Marcel commented on these figures, noting that inflation is nearing its target.He stated that opposing factors would influence short-term inflation. The peak impact of higher electricity tariffs will occur in the first half of 2025.

Chile’s economy grew by 1.1% in May compared to the same month last year. This growth fell short of local market expectations. The Central Bank of Chile released this information earlier this month.

Chile Lowers Economic Growth Forecast to 2.6% for 2024

This economic update reflects the government’s response to shifting economic conditions and its efforts to manage inflation.

These adjustments underscore the importance of closely monitoring economic performance. They show the need to adapt forecasts to maintain stability.

These changes matter because they indicate how external factors and sector-specific challenges can influence broader economic predictions.

By making these revisions, Chile aims to provide a more accurate economic outlook. This ensures that policies remain relevant and effective in addressing current and future economic conditions.