The central bank of Chile increased its forecast for inflation from 10.8% to 11.4% in its quarterly monetary policy report. The bank also increased its estimates for 2022 GDP growth to 1.75-2.25%. In comparison to an earlier prediction in the range of zero to one percent, it forecast a contraction of 0.5-1.5% for 2023.
The adjustment occurs at a time when job growth has stalled, real wages are still declining, and the remaining stimulus funds from 2021 have run out, it continued. The average copper price is predicted to be $4.00 per pound this year, down from the previously predicted $4.25. According to the bank, the current account deficit should decrease in the upcoming quarters as a result of adjusted spending and a better savings-investment balance than the previous year.
After accounting for seasonal impacts, the bank reported that quarter-over-quarter consumption had decreased by 2. 4%, more than they had anticipated. The benchmark interest rate of Chile’s central bank increased to 10.75% on Tuesday, of the population was quoted as saying that the monetary policy rate is “near the highest level envisaged in the central scenario.”