Category: Chile

Juan Villarzu, president of Chile’s state-owned copper company Codelco, said the company would benefit from privatization. Villarzu said Codelco needs to make larger investments to meet growing global demand for copper, and it would be better able to make those investments as a private company. CODELCO is considering raising its production from 2.5 million tons of copper per year to 3 million in 2020 to meet increasing demand, especially from China.

The International Monetary Fund is predicting Chile’s GDP will growth 6.1 percent this year, up from its previous estimate of 4.7 percent. The Fund predicted growth of 5.4 percent in 2006 and said Chile’s economy will be boosted by increased exports and foreign investments.

Copper exports from Chile were up 16% year-on-year in March to $ 1.62 billion for a total $3.78 billion in the first quarter. Copper is Chile’s number one export and strong demand, especially from China and the United States, is helping the economy grow at a robust rate. China recently overtook the US and the leading importer of Chilean copper.

Economists expect Chile’s GDP to grown 5.8% this year, according to a poll conducted by the country’s central bank. This figure is slightly less than the government’s projection of 6%. The central bank raised its lending rate to commercial banks 25 basis points last week to 3 percent in a move to control inflation. Chile continues to benefit from strong global demand for copper.

Chile’s state rail company EFE has placed roughly $100 million-worth of local currency bonds. The inflation-indexed 30-year bonds, which are guaranteed by the Chilean government, will finance part of the company’s $1 billion 2003-2005 investment plan. Fitch Ratings and Humphreys rated the bonds AAA. Demand for the bonds was 2.7 times the initial offer, with the final interest rate at 3.79%.

The government announced that Chile’s trade surplus fell to $1.053 billion last month, 12% less than in the same period last year. Economists had expected a balance of $1.30 billion. Last month, Chile posted a $585 million surplus in February. Exports last month rose 20% year on year to $3.65 billion, and imports rose 39% to $2.6 billion. Economists say the data suggest continuing robust economic activity, with external demand, investment, and consumption all making a strong contribution to growth.

Chile’s Central Bank increased its benchmark lending rate by 25 basis points to 3%, a two-year high. Central bankers said they expect to continue raising rates. International risks to the economy have increased and oil prices probably will impact inflation in the short term, the bank said. Economists expect rates to increase to 4% by year-end, according to a Central Bank survey.

Chile’s consumer prices climbed in March at the fastest pace in two years as rising oil prices boosted transport costs. Prices jumped 0.6 percent from February, the first increase in four months, raising inflation to 2.4 percent in the last 12 months. The report sparked speculation that Chile’s central bank would raise its benchmark lending rate again this week.

Chile’s state-owned railway company Empresa de Los Ferrocarriles del Estado (EFE) plans to issue bonds worth $102 million on April 7. The bonds will have an interest of 5.2 percent and will mature in 30 years. The debt is guaranteed by the Chilean government and is rated AAA by Fitch Ratings.