Central Bank raises its growth forecast for Chile to 12% this 2021

The Central Bank of Chile published the last Monetary Policy Report (IPoM) for 2021, a report marked by a much more positive vision for activity at the close of the current year, but with a series of warnings and yellow lights for the next two years.

The issuer starts by realizing that the Chilean economy has remained on a “strong path of expansion” compared to the previous Report, hand in hand with private consumption. Thus, the issuer revised up the expected range for the growth of the Gross Domestic Product (GDP) this year, from 10.5% -11.5% in September, to between 11.5% and 12% this time.

“With this, growth in 2021 will exceed expectations in September, closing the year with activity levels significantly higher than those prior to the crisis, as well as its estimated potential,” the issuer said.

Despite the good performance this year, the landing for the economy next year will be forced. And although the issuer maintained the expansion range for the Product of the next year between 1.5% and 2.5%, it reduced its forecast for 2023, going from a range between 1% and 2% to between 0% and 1 percent.

This revision for the following years goes hand in hand with a contraction in key components, with internal demand that will fall 0.5% and 0.7% in 2022 and 2023, respectively, versus growth prospects of 0.9% and 0.5% in the previous Report, respectively.

A similar situation is looming for consumption, with projected falls of the same magnitude as demand.


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