Chile's Central Bank Raises 2024 GDP Growth Forecast

• Chile's GDP is expected to grow 2% to 3% in 2024, up from a previous forecast of 1.25% to 2.25% growth, the country's central bank said on Wednesday.
• The revised forecast was issued a day after slashing its benchmark interest rate by 75 basis points to 6.5% and signaling further rate cuts.
• Chile's economic activity has surprised to the upside in early 2024, overshooting expectations in January and February.
• According to the Central bank, inflation has declined sharply towards the 3% target after peaking in 2022. This was largely due to reduced domestic spending and a narrowing activity gap.
• The central bank said it now projects headline inflation to end this year at 3.8% in light of the local currency's recent depreciation, up from a previous estimate of 2.9%, but still sees it converging to the target within its two-year policy horizon.
• It also projected GDP growth in 2025 and 2026 to range between 1.5% and 2.5%, indicating a convergence to the economy's potential growth rate. The projection for next year came in slightly below the previous growth forecast of 2% to 3%.

(Source: Reuters)