Chile's cbank cuts 2016 growth forecast to 1.25pc

The Pak Banker - - COMPANIES/BOSS -

Chile´s long-her­alded eco­nomic re­cov­ery is on hold once again, at least for the rest of this year, the cen­tral bank said, cutting its growth and in­fla­tion fore­casts for 2016. The world's largest cop­per pro­ducer will ex­pand 1.25 per­cent to 2.25 per­cent this year, pol­icy mak­ers said in their quar­terly mone­tary pol­icy re­port Mon­day. The pre­vi­ous es­ti­mate was 2 per­cent to 3 per­cent. Con­sumer prices will rise 3.6 per­cent, com­pared with the prior es­ti­mate of 3.8 per­cent. "The econ­omy will grow be­neath its po­ten­tial for a good part of the forecast pe­riod," pol­icy mak­ers said. "Ac­tiv­ity and de­mand have lost strength, the la­bor mar­ket has weak­ened and con­sumer and cor­po­rate sen­ti­ment re­main pes­simistic." In­creased gov­ern­ment spend­ing and loose mone­tary pol­icy have failed to re­vive growth in an econ­omy reel­ing from a slump in cop­per prices, prompt­ing pol­icy mak­ers to re­duce their growth es­ti­mates for eight con­sec­u­tive quar­ters.

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