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Chile Cuts Forecast for 2019 GDP Growth Amid Mining, Commerce Slump


FILE - Chile's Finance Minister Felipe Larrain attends to a meeting at La Moneda Presidential Palace in Santiago, Chile, March 21, 2018.
FILE - Chile's Finance Minister Felipe Larrain attends to a meeting at La Moneda Presidential Palace in Santiago, Chile, March 21, 2018.

Chile expects its economy to grow 3.2% in 2019, down from a previous estimate of 3.5% in April, the country's finance minister said Tuesday, amid slumping copper prices and a fall in global commerce.

Finance Minister Felipe Larrain told a Chilean Senate commission he expected the average copper price for 2019 to be $2.85 per pound, down sharply from a previous estimate of $3 per pound.

Copper exports from Chile, the world's top producer of the red metal, can account for as much as 15% of the nation's GDP.

"We all had higher hopes when the year started ... but to grow at 3% would be a great accomplishment for our economy this year," Larrain said.

Chile's mining sector was also impacted earlier this year by unusually heavy rains in its copper-rich northern desert and a two-week strike at Codelco's Chuquicamata copper mine, one of the world's largest.

FILE - A car is trapped in mud due to floods near a copper mine in Chuquicamata, Chile, Feb. 7, 2019.
FILE - A car is trapped in mud due to floods near a copper mine in Chuquicamata, Chile, Feb. 7, 2019.

That prompted Chile's Central Bank to cut its prediction for growth last month to 2.75% to 3.5% from a previous view of 3% to 4%.

Larrain predicted annual inflation to hit 2.2% this year, up slightly from a prediction of 2.1% in March.

The administration of center-right President Sebastian Pinera has planned nearly $1.5 billion in public spending in an effort to boost growth in the second half of 2019, Larrain said.

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    Reuters

    Reuters is a news agency founded in 1851 and owned by the Thomson Reuters Corporation based in Toronto, Canada. One of the world's largest wire services, it provides financial news as well as international coverage in over 16 languages to more than 1000 newspapers and 750 broadcasters around the globe.

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