Banco Central de Chile revised down its economic growth forecast for 2019 to between 2.25% and 2.75% from a previous range of 2.75% to 3.5%.
In its quarterly monetary policy report, the central bank said an expectation of higher growth in the second half will not be enough to offset the sluggish economic activity observed in the first half.
The central bank's growth estimate for 2020 also fell to between 2.75% and 3.75%, from between 3% and 4% in its June report. The forecast for 2021 remains between 3% and 4%.
The central bank also cut its year-end inflation forecast to 2.7% from 2.8% previously. Inflation fell below the central bank's 3% target during the first half of the year, according to Reuters.
Banco Central de Chile on Sept. 3 cut its monetary policy rate by 50 basis points to 2.0% and signaled that it could ease policy further, noting that "the economy's performance of the second quarter and its outlook indicate that inflation will take longer to converge to the target."
Average copper price fell to $2.70/lb so far this year from $2.96/lb in 2018 amid global trade tensions, the central bank estimates. Chile is the world's top copper producer, with exports accounting for about 15% of the country's GDP.
