UPDATE 2-Chile sees 2013 growth easing to 4.8 pct on global woes

Tue Oct 2, 2012 12:46pm EDT

* 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.
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