Growth Slows In Chile

The Chilean economy expanded by only 4.8% in the first half of the year compared with the same period last year, the lowest first-half growth since 2003. The economy grew by 4.5% in June. Analysts say government growth forecasts of 5.7% for the year now look overly optimistic and have cut forecasts to around 5.2% in light of the disappointing results. The slowdown in growth has been blamed on the poor performance of industry and mining and a cooling off of domestic consumption. Industrial production grew by 4.0% in the first six months of the year, with copper production up only 3.4%. The Central Bank’s hike in interest rates last month, which have curbed investments, have also contributed to the slowdown and most analysts predict the Bank will leave rates unchanged at their August 10 meeting.