Andrés Velasco: Inflation could be at close to 4% in 2008

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SANTIAGO.-  The Minister of Finance indicated on Tuesday that inflation could be near 4% in 2008 once a new law project to reduce the tax on gasoline is passed.  The figure falls half a percentage point lower than the Central Bank’s estimate for the year.

The proposed tax cut on gasoline was announced by the government on Monday.  The measure is accompanied by several other initiatives aimed at jump-starting the economy and reducing inflation amidst wavering confidence in external markets, due to fears of a recession in the United States.

While on Radio Cooperativa, Minister Andrés Velasco stated that the reduction “should lower inflation during the year by a total of one-half a (percentage) point”.

During 2007, Chile’s inflation rate reached 7.8%, its highest figure in twelve years, due to rises in energy costs and food prices.