UPDATE 2-Chile sees 2013 growth easing to 4.8 pct on global woes
* Chile GDP seen up 5 pct this year * 2013 domestic demand seen up 5.5 pct; inflation 3 pct * World No.1 copper producer so far showing brisk growth By Felipe Iturrieta SANTIAGO, Oct 2 (Reuters) - Economic growth in Chile is seen slowing to 4.8 percent next year, held back by global turbulence and down slightly from an upwardly revised 5 percent estimate for 2012, a Finance Ministry report showed on Tuesday. Chile has proved surprisingly resilient to the euro zone debt crisis so far this year, but economic growth in the small, export-dependent country is seen slowing in 2013 on ebbing global demand. "Our responsible fiscal and monetary policies give us tools to lessen the negative of effects of external risks, and thus protect economic activity and jobs," the report presented to Congress said. The estimate for world No.1 copper producer Chile's 2013 economic growth is in line with the 4.8 percent spending increase proposed in the government's budget unveiled on Monday. The 2013 budget bill submitted to Congress sees annual inflation at 3.0 percent, right on the central bank's current target. Domestic demand is seen growing 5.5 percent, which would be a pick up from July's forecast of 5.2 percent growth this year. Chile's peso is seen trading at an average 496 per U.S. dollar next year, a significantly weaker level than Tuesday afternoon's level of around 472.90 per dollar. The central bank may intervene in the foreign exchange market to stem the peso's strength if such a move is justified, bank president Rodrigo Vergara said last week. The price for top export copper is seen at $3.40 per pound, or around $7,495.7 per tonne. Three-month copper on the London Metal Exchange edged up 0.37 percent to trade $8,330 per tonne on Tuesday at 1612 GMT as the dollar fell and funds bought, though the upside was capped by Europe's debt crisis and uncertainty ahead of key data. LOW UNEMPLOYMENT, BRISK DOMESTIC DEMAND Chile in July had revised down its forecast for economic growth this year to 4.7 percent from 5.0 percent due to the softening global demand. A low unemployment rate, brisk domestic demand and strong economic activity, weighed against a threatening global backdrop, are seen pressuring the central bank to keep its key interest rate at 5.0 percent in the near future, and not reduce it to stimulate growth, as has been the case recently in Latin American peers Colombia and Brazil. In addition to producing around a third of the world's copper, Chile exports wood products, wine, salmon and fruits.
- Tweet this
- Share this
- Digg this