Investing.com -- Chile's central bank has released its December Monetary Policy Report, projecting economic growth between 1.5% and 2.5% for 2025 and 2026. This follows a 2.3% expansion in the country's economy this year. The report attributes these forecasts to increased public spending and a greater contribution from the external sector, balanced by reduced stimulus for household and business demand.
The bank's report indicates that the economic growth for this year will be at the lower end of the previously estimated range of 2.25-2.75%.
In terms of inflation, the bank estimates that the annual rate will close this year at 4.8%, and conclude 2025 at 3.6%. By early 2026, it expects the inflation rate to ease to the target of 3%. The report acknowledges that inflation is currently higher than what was expected a few months ago, attributing this to factors such as the global appreciation of the U.S. dollar and an increase in local labor costs.
The central bank also announced on Tuesday that it had reduced the key interest rate by 25 points to 5.0%. It stated that short-term risks for inflation were leaning upwards, necessitating caution.
The report suggests that over the medium term, a weaker outlook for domestic demand should relieve cost pressures.
Additionally, the bank has projected the price of copper, which is Chile's primary export, to be $4.20 per pound in 2025 and $4.30 in 2026.
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