Experts say Chilean economy will shrink 0.5% this year

SANTIAGO.- Experts polled by the Central Bank as part of the Economic Expectations Poll for April of 2009 have predicted that the Chilean economy will contract by 0.5% this year.

The number marks a significant revision when compared to the 0.2% estimated in the previous poll. For the seventh consecutive time, market analysts have decided to slash the growth forecast for this year.

If the projection is correct, this will be the first time that the national economy has contracted since the Asian crisis in 1999, when it shrunk by 0.8%.

Furthermore, estimates for the February-March-April quarter indicate that the GDP will also decrease by 1.5%.

With regards to the interest rate, the market expects that the Central Bank will cut the figure from 2.25% to 1.75% today during its meeting.

Meanwhile, specialists predict a 12-month inflation rate of 1.8% for December of this year.

Finally, the experts polled indicated that they expect the exchange rate to be positioned at $580 pesos per US dollar during the next two months.