The Chilean central bank said on Wednesday that the economy of the world’s top copper producer would contract between 5.5% and 7.5% in 2020, taking it to the lowest levels since the Latin American debt crisis of the 1980s.
Chile, the world's largest producer of copper, reduced on Thursday its price projection for the precious metal for 2019 from US$3.05 to US$2.89 per pound due to a drop in demand from the planet's largest consumer, China.
Chilean authorities have approved a US$2.5 billion expansion of BHP Billiton's Spence copper mine, a local newspaper reported, though the company has not yet decided whether to go ahead with the project.
Chile's government has cut its forecast for 2017 economic growth to 1.5% from 2.25%, Finance Minister Rodrigo Valdes said on Monday as the long-awaited recovery remains elusive.
The US dollar reaffirmed its value in the Chilean money exchange market during the first week of the year, trading in the commercial sector at an average of 728 Pesos, almost at its highest level of 735 twelve years ago, 31 March 2003.
A slowdown in China, which gobbled up raw materials everywhere from Australia to Chile, exacerbated a supply glut in most major commodities. And Goldman Sachs thinks the pressure is likely to persist as it noted its underweight position in commodities for the next 12 months.
Chile’s inflation rate rose to the highest this year in July as the Peso approaches its weakest level in more than a decade. Prices climbed 0.4% in the month, the National Statistics Institute said on its website Friday. Annual inflation accelerated to 4.6% from 4.4% the month before, while the central bank target is between 2% and 4%.
The US dollar ended Thursday trading in the Chilean money exchange market at its highest since December 2008, that is 674 Pesos for the greenback. Currently and seven years ago the main reason has been the US monetary policy: the sub-prime crash in the US and fears of the debacle expanding to the rest of the world, and now growing chances of the Federal Reserve deciding on a rise of the prime rate.