Chile'scentral bank, Banco Central deChile, lowered its economic growth estimate for 2016 to between1.25% and 2.25% as a partial withdrawal of economic stimulus funds could befurther observed, Reuters reported March 28.

The centralbank's previous GDP forecast was between 2.0% and 3.0%. The economy is alsoexpected to rebound between 2.0% and 3.0% by 2017, the central bank noted inits monetary policy report.

Domesticdemand in 2016 is expected to expand 1.5%, as consumption grows 1.8% andinvestment slightly spikes by 0.5%.

Meanwhile,the central bank said inflation will remain at about 4% for a few more monthsbefore declining in the latter half of the year. It is expected to return to 3%in 2017 as the growth in activity and demand weakens.