MercoPress. South Atlantic News Agency

Chile's growth forecast downed

Chile's Central Bank downed to 2% the country's 2002 economic growth forecast and estimated that next year Chile will fluctuate between 3,5 and 4,5%, given adverse world conditions.

To justify the decrease from 2,5% to 2%, Central Bank claims that contrary to expected, in the last few months economic international prospects worsened and Chile's main trading partners suffered accordingly.

"These are the reasons for a slower economic dynamism and a reduced inflationary thrust", said Central Bank president Carlos Massad addressing the Congressional Finance Committee. Inflation in Chile is expected to reach 3,1% in 2002 and drop to 2,8% in 2003.

Chile also expects this year a trade surplus in the range of 2,5 billion US dollars, while the balance of payments current account will experience a deficit equivalent to 0,5% of GDP, a considerable drop from the original 2,5%.

However an ever contentious issue in the estimated price of copper, still Chile's main export. The 2002 budget was calculated on 73 US cents the pound, but it will finish the year at 70 US cents. Next year the price is expected to average 76 cents the poung.