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OECD ups 2018 growth forecast for Chile to 2.9%

The Organization for Economic Cooperation and Development said in a report that a rebound in copper prices and a gradual recovery in investments should help Chile's economic growth accelerate to 2.9% in 2018 and 2019 from 1.5% in 2016 and 1.7% in 2017.

The new 2018 growth forecast is slightly higher than the 2.8% expansion projected by the OECD in June 2017.

In announcing the new forecasts, the OECD said improving demand, favorable financing conditions and recent policy measures to support exports and productivity will bolster business investment in Chile. However, it added that the performance of Chile's main trading partners, including China and the U.S., represents a risk for the South American country's economy.

The organization also made a number of recommendations to make Chile's growth more sustainable, including the implementation of a banking law that would incorporate Basel III capital adequacy requirements and strengthen supervision of lenders.

The report also sees Chile's fiscal deficit declining to 1.9% of GDP in 2018 and 1.7% in 2019 from 2.8% in 2017. The country's unemployment rate, meanwhile, is expected to fall to 6.5% in 2018 and 6.3% in 2019 from 6.7% in 2017.