|Chile’s economic growth moderated in 2013 and is projected to remain weak during the first half of 2014. GDP growth is projected to pick up gradually by the end of the year and into 2015, led by investment and by exports, which will benefit from the depreciation of the exchange rate.
The recent drop in world copper prices, which partially reflects slowing demand from China, has put downward pressure on the peso’s external value and, as the terms of trade deteriorated, the current account deficit is expected to increase slightly. Exchange-rate depreciation has caused increases in food and energy prices, bringing headline inflation closer to the centre of the central bank’s target range (3%). As core inflation remains low and inflation expectations are well anchored, monetary and fiscal policies can remain supportive.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.