(Adds detail on cost of quake/fire reconstruction)
By Anthony Esposito
SANTIAGO May 19 Chile's government will have to
find a financing mechanism to make up for an income shortfall in
2014 as economic growth in the world's top copper producer cools
to around 3.4 percent, Finance Minister Alberto Arenas said.
He estimated the government's coffers would receive $2
billion less in income this year than that estimated in the
fiscal budget in September.
"There was an over-estimation of the income that could be
obtained for 2014 based on the macroeconomic scenario (the
previous government) presented to Congress in September 2013,"
Arenas told lawmakers on Monday.
Socialist President Michelle Bachelet took office in March,
following conservative Sebastian Pinera's four-year term.
Less than a month after Bachelet took over, the country was
hit by two natural disasters. A powerful 8.2 earthquake and
tsunami shook northern Chile in early April, followed two weeks
later by a huge fire that devastated parts of port city
The cost of reconstruction after the two disasters would be
some $1.25 billion, Arenas said to reporters after the
presentation to Congress.
Arenas said the government estimated economic growth would
be around 3.4 percent in 2014, in line with predictions by the
The bank's last official economic projection, published in
its quarterly Monetary Policy report on March 31, forecast Chile
would expand between 3.0 percent and 4.0 percent this year. That
compares with 4.1 percent growth in 2013.
Data published earlier on Monday showed Chile's economy grew
2.6 percent in the first quarter compared with a
year earlier, its slowest quarterly expansion in four years, as
(Reporting by Anthony Esposito, Fabian Cambero and Felipe
Iturrieta, Writing by Anthony Esposito and Rosalba O'Brien;
Editing by Chizu Nomiyama and Andrew Hay)