MercoPress. South Atlantic News Agency

Regional turbulence hits Chile

Chile's Finance Minister Nicolás Eyzaguirre lowered the country's annual estimated growth from 3,5 to 3,2% as direct consequence of international factors, particularly the Argentine and Brazilian situation.

"The moderate growth can be explained by international events such as the crisis in neighbouring countries", said Mr. Eyzaguirre.

Addressing the Congressional Finance Committee Mr. Eyzaguirre added that revenue had dropped and the annual budget will finish with a 0,7% deficit instead of the0,3% originally estimated in the Appropriations bill.

"Our original estimates regarding factors with direct influence in tax revenue, such as GDP growth, home demand and international copper price are below those presented when the budget was first discussed, therefore the deficit", explained Mr. Eyzaguirre.

However the new estimates "should not have further consequences, GDP from 3,5 to 3,2%; home demand 3,3% instead of 5,5% and copper price down to 73,9 US cents from 78 US cents the pound", indicated the head of the Budget and Planning Office Mr. Mario Marcel.

"We have a sound fiscal policy, supported on a structural surplus, and a autonomous Central Bank with its own inflation and exchange rate targets, and this constitutes the best protection against worsening external conditions and makes Chile different from the rest of Latinamerica", stressed Mr. Marcel.

However Mr. Marcel indicated that in the coming weeks the government will be convening fifteen outstanding economists and experts to assess the potential GDP for Chile, who will elaborate a paper indicating the methodology and mechanisms for such a target.

Besides Chile will request technical assistance from the IMF and World Bank to develop an information and management system with permanent update data on financial assets and liabilities, and a fiscal transparency project during the second half of the year.