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Chile's central bank cuts GDP growth forecast for 2017

Banco Central de Chile on April 3 cut its GDP growth forecast for 2017 by a half point to between 1% and 2%, largely due to the effects of a mining strike and forest fires earlier in the year.

The central bank had previously forecast 2017 GDP to hit between 1.5% to 2.5%.

In its quarterly monetary policy report, the Chilean regulator blamed 20 basis points of the reduction to the strike in the copper mine at Escondida that lasted 43 days and ended in March. Forest fires in the summer months of January and February also impacted the decreased growth expectations.

The bank maintained its inflationary forecast for December 2017 of 2.9% and projected inflation to be 3% in 2018.

Stressing that aforementioned events would not have significant long-term implications, the central bank forecasts between 2.25% and 3.25% growth in 2018.

The bank has cut benchmark interest rates 50 basis points so far this year amid persistent weakness in employment and demand.