Category: Chile

Chile’s economy expanded by 5.9% year-on-year in August, driven by the high price of copper in the global market. This followed growth of only 4.4% in July. The higher-than-expected growth and quickening rate of inflation may prompt more hikes in interest rates, according to analysts. The Central Bank raised the benchmark lending rate last by a quarter of a percentage point on 8 September to 4%.

Inflation in Chile rose to 1.0% in September, following August figures of 0.3%. This brings cumulative inflation for the first nine months to 3.9%. Higher transportation costs due to record oil prices drove prices up. Meanwhile, Paraguay recorded inflation of 1.4%, pushing the cumulative rate to 6.9% as at the end of last month. Again, high oil prices are blamed on the rising cost of living in the country.

Chile remains Latin America’s most competitive economy, according to this year’s World Competitive Index, published yesterday by the World Economic Forum. Chile ranked 23 in the world, one place down from last year, but ahead of many EU economies. Second in the region, and a non-mover from last year, was Uruguay at 54. Countries which rose in the rankings this year include Colombia, which went up from 64 to 57 and Argentina, up from 74 to 72. Dropping down several places were Mexico, Brazil and Venezuela which fell to 55 (48 in 2004), 65 (57) and 89 (85) respectively. The Index aims to analyze the medium and long-term growth potential of economies, using three main factors: macroeconomics, quality of public institutions and the capacity to innovate and implement new technologies. The table was topped by Finland, followed by the US.

London-based sugar broker ED&F Man is looking to buy 45% of Chile’s major agro-industrial group and largest sugar-producer – Empresas Iansa. ED&F Man plans to take up an option to buy the remaining 51% stake in Inversiones Greenfields, currently owned by Spain’s Ebro Puleva, for $12 million. Greenfields controls 51% of Campos Chilenos, which in turn owns 45% of Iansa.

Earnings for Chile’s banking sector for the first half of 2005 rose 9.5% year-on-year to $1 billion. Banco Santander Chile, the country’s largest financial institution, recorded income of $300 million for the period.

Following a year of negotiations, Chile expects to sign a trade agreement with China in November which it hopes will make the Latin American country a bridge for Chinese trade in the region. Chile currently has trade agreements in Asia with Singapore, Brunei and South Korea and is working on one with Japan.

Chile’s Codelco, the world’s largest copper producer, sold $500 million 30-year bonds on Friday, the longest ever maturity on its debt. The company sold the 5.625% bonds due in 2035 to yield 5.75%, 1.18 percentage points more than US Treasuries. The sale was managed by Deutsche Bank and JPMorgan Chase & Co. The money will be used to refinance Coldelco’s debt as it borrows to boost production in the face of surging demand.

The Chilean government again raised economic growth forecasts, thanks to buoyant copper prices and strong domestic activity. The Economy Ministry forecasts GDP growth this year at 6.2%. It also expects a record investment rate of 27% of GDP.

Chile’s London-listed Antofagasta mining group posted a 78% leap in first half pre-tax profits, thanks to record prices for its two main products, copper and molybdenum. Revenues from its three copper mines in Chile, its South American water and rail businesses rose to $1.12 billion from $753 million in the same period of 2004. Pre-tax profits rose to $739.5 million from $415.4 million.

Presidents Ricardo Lagos of Chile and Eduardo Rodríguez of Bolivia are to meet on Thursday in New York for the first time since Rodríguez took office in June. The meeting will be held against the backdrop of the UN’s 2005 World Summit taking place this week. Relations between the two countries have warmed in recent years with Chile offering to Bolivia’s then president, Carlos Mesa, at the 2004 Summit of the Americas to re-establish bilateral relations with Bolivia. The two countries broke off diplomatic relations in 1978 following a century-long dispute regarding Bolivia’s access to the sea and only maintain ties at consular level.