MercoPress. South Atlantic News Agency

Positive facts, negative expectations

Chile registered the lowest country risk rating in Latinamerica with 59 basic points reflecting the excellent moment of the country's economy and government finances.

In practical terms 59 points means the Chilean government would have to pay 0,59% above the (approx. 4%) United States federal bonds for any funds it raised internationally.

The Chilean risk compares favourably with other large economies of the area: Brazil has a 396 points rating and Argentina, 411.

Copper the mainstay of Chile's trade, representing 45% of exports, registered in June the highest price per lb in 17 years with overseas sales that month reaching 1,5 billion US dollars and 7,8 billion US dollars in the first half of 2005, according to the latest release from the Central Bank.

June exports were 55% above the same period a year ago and January/June sales 16% over the first half of 2004.

It is estimated that for each US cent the average annual international price of copper raises, Chile receives an additional 100 million US dollars.

Most of the country's copper production is concentrated in Codelco, the government owned and managed company which is the world's leading producer with two million tons per annum.

However in spite of the strong dynamism of the Chilean economy with significant job creation a majority of public opinion considers the situation average.

According to the latest poll from the Centro de Estudios Públicos, surveyed during the last week of June and first of July among 1,505 people above 18 and in 148 cities and towns, only 20% consider the current Chilean situation as "good or very good".

Actually 46% rate it as "not good or bad" and 34% "bad or very bad".

Even more surprising is that 57% of those interviewed believes there will be no (positive) changes in the mediocre economic situation in the next twelve months.

The latest reading is higher than the 49% of last December when the previous similar public opinion poll.

Only 32% expect a greater economic expansion and 7% believe things will worsen.