Experts make new cut to growth forecasts for Chilean economy

SANTIAGO.- Experts polled by the Central Bank as part of the institution's Economic Expectations Poll for May 2009, have indicated that they expect the Chilean economy to shrink 0.7% by the end of the year.

The figure represents yet another adjustment when compared to the -0.5% predicted by the previous poll. This is the eighth consecutive cut to the forecast for economic growth this year.

Furthermore, estimates indicate that the GDP variation for the April-May-June quarter will be -1.5%.

Meanwhile, economic growth expectations for 2010 have remained at 3.0% and experts have predicted a Monthly Economic Activity Indicator (Imacec) of -2.0% for April.

With regards to interest rates, those polled expect that they will drop by up to 1% over the next two months.

Within 11 months, experts say the interest rate should reach 2% and is expected to be at 3.5% by December of 2010.

For the 12 month inflation rate in December of 2009, analysts are predicting 1.2%, which is outside of the meta-range for the Central Bank (3% with a variation of +/- 1 percentage point).