SANTIAGO – Chile’s Central Bank on Monday adjusted its forecast for economic growth in 2016 to a range of 1.25-2.25 percent, down from the 2-3 percent the banks projected last December.
The figure is part of the first Monetary Policy Report of 2016, presented by Central Bank chief Rodrigo Vergara before the Senate Finance Committee.
The downward revision was expected by financial markets and follows a government statement last week trimming its own projection of growth this year to 2 percent, compared with the 2.75 percent estimate included in the 2016 budget bill.
Experts and analysts taking part in the March edition of the Monthly Survey of Economic Expectations also lowered their expectations of growth in 2016, from 1.9 percent to 1.7 percent.
The Central Bank noted that the less optimistic forecast “implies the economy will continue growing below its potential.”
“The external impetus that Chile’s economy will receive in 2016 and 2017 will be smaller than expected in December” due to a more pronounced global slowdown, the Central Bank said.
Regarding the domestic economy, the report said that the available data point to weakening activity and demand, a battered labor market, and deepening pessimism among consumers and companies.