Experts reduce growth estimate for Chilean economy

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SANTIAGO.- Experts questioned by the central bank's October Economic Forecast Poll have significantly reduced their growth estimate for the Chilean economy.

Analysts lowered their 2008 economic growth projection from 4.3% reported in the previous poll to 4.1% in the most recent survey, while they reduced their forecast for 2009 from 4.2% to 3.5%.

Meanwhile, the experts boosted their inflation forecast for 2008 from 8.5% to 8.7% and reduced the 2009 figure from 4.9% to 4.7%.

Additionally the analysts predict that the economy will expand by 4.6% in October. For 2010, they have maintained their GDP growth forecast at 4.5%.

With regards to the interest rate, the analysts expect the Central Bank to raise the figure by 25 base points to 8.50% at their meeting tomorrow. Furthermore those polled believe that the monetary policy rate will continue at the same level for the next two months.

Nearing December of 2009, the key interest rate could drop to 7.00%, slipping even further to 6.75% over the next 23 months.

Lastly, the analysts predicted that the dollar would be situated at $564 pesos within the next two months and at $573 pesos within the next 11 months. Over the next 23 months, the U.S. currency could reach $580 pesos on the dollar.