Chilean market projects 1.5 percent economic decline in 2023

According to the February Economic Expectations Survey (EEE) released, Chilean market analysts, projected a 1.5 percent decline in the economy by the end of 2023 and an annual decline of 1.7 percent in the first quarter of the year, according to the February Economic Expectations Survey (EEE) released Friday by the Central Bank of Chile.

Economists surveyed in the February EES expect the country’s economy to grow 2.1 percent in 2024.

The specialists also pointed out that inflation in Chile will vary by 0.4 percent this month and 0.8 percent in March.

They also estimated an increase in consumer prices of 5.3 percent at the end of the year and 3.3 percent in 2024, with which they anticipated an annual drop in inflation in line with the Central Bank of Chile’s target range of 3 percent.

The monetary policy rate, a tool used to curb inflation by cutting monetary stimulus, is expected to remain at 11.25 percent and decline to 10 percent by mid-2023.

The February FES projected the policy rate to reach 7.5 percent next December.

At its first meeting of 2023, the Central Bank of Chile again ruled out raising the monetary policy interest rate.

It rose from 10.75 to 11.25 percent in October to contain inflation, reaching its highest level since 1998.

The regulator unanimously argued that global inflationary pressures remain elevated, and major central banks have continued to raise their benchmark interest rates.

“The growth outlook for 2023 remains weak, even though it shows a limited upward adjustment,” the central bank said on 26 January.

Chile ended 2022 with a cumulative inflation rate of 12.8 percent, the highest in decades.