Economy

Chile's Central Bank predicts economy will shrink more than expected in 2020

The more favorable outlook for next year will be reinforced by a higher copper price of $3.20 per pound in 2021, the bank predicted

Photo: REUTERS/Pablo Sanhueza
  • The more favorable outlook for next year will be reinforced by a higher copper price of $3.20 per pound in 2021, the bank predicted;
  • The recently announced health restrictions in the capital, Santiago, could slow the economic recovery.

Chile’s central bank projected on Wednesday that the economy of the world’s largest copper producer will decline from 5.75% to 6.25% in 2020, more than previously predicted as the coronavirus crisis affects production.

However, the central bank said in its quarterly economic report Ipom that GDP will recover between 5.5% and 6.5% in 2021, a stronger recovery than initially expected.

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The more favorable outlook for next year will be reinforced by a higher copper price of $3.20 per pound in 2021, the bank predicted. The metal represents about half of the South American country’s exports and is vital for economic production.

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Even so, bank officials were cautious in their optimism for the coming months, warning that the recently announced health restrictions in the capital, Santiago, could slow the economic recovery.

(Translated by LABS)

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