SANTIAGO, June 6 (Reuters) - Growth in Chile's economy
slowed to 0.3 percent in April compared to March, the central
bank said on Monday, bolstering views that the bank will raise
its interest rate in June but at a slower pace.
The bank revised upward its IMACEC indicator of economic
activity to 0.6 percent in March against February, originally
reported as a 0.3 percent rise.
On a year-on-year basis CLIP=ECI the economy expanded
6.3 percent, slowing sharply from the 15.2 percent jump seen in
March and below market expectations of 7 percent. March's
figure was unusually high due to a low comparison base after a
devastating earthquake in February 2010 that hit the economy.
Many in the market are raising year-end economic growth
forecasts on strong first-half domestic demand but expect the
economy to slow in coming months and converge with its real
potential. A higher comparison base in the second half of 2010
should lower coming economic growth readings.
The central bank expects the economy of Chile, the world's
top copper producer, to grow between 5.5 and 6.5 percent in
2011. It grew 9.8 percent in the first quarter.
"Some moderation in activity (is) expected for the second
half of 2011 on the back of reduced monetary and fiscal
stimulus and a tighter labor market," Goldman Sachs' senior
analyst Alberto Ramos said in a note to clients.
The central bank has raised rates by 175 basis points so
far this year -- the fastest tightening pace in Latin America
-- in a bid to curb inflation.
The bank is expected to ease the pace of rate hikes after
inflation expectations fell. The market is betting on a
25-basis-point increase when the bank meets on June 14.
The bank calculates its month-on-month IMACEC data in
seasonally adjusted terms. A monthly gauge, the IMACEC measures
more than 90 percent of the components comprising Chile's gross
domestic product, which is published quarterly.
Source: www.reuters.com
slowed to 0.3 percent in April compared to March, the central
bank said on Monday, bolstering views that the bank will raise
its interest rate in June but at a slower pace.
The bank revised upward its IMACEC indicator of economic
activity to 0.6 percent in March against February, originally
reported as a 0.3 percent rise.
On a year-on-year basis CLIP=ECI the economy expanded
6.3 percent, slowing sharply from the 15.2 percent jump seen in
March and below market expectations of 7 percent. March's
figure was unusually high due to a low comparison base after a
devastating earthquake in February 2010 that hit the economy.
Many in the market are raising year-end economic growth
forecasts on strong first-half domestic demand but expect the
economy to slow in coming months and converge with its real
potential. A higher comparison base in the second half of 2010
should lower coming economic growth readings.
The central bank expects the economy of Chile, the world's
top copper producer, to grow between 5.5 and 6.5 percent in
2011. It grew 9.8 percent in the first quarter.
"Some moderation in activity (is) expected for the second
half of 2011 on the back of reduced monetary and fiscal
stimulus and a tighter labor market," Goldman Sachs' senior
analyst Alberto Ramos said in a note to clients.
The central bank has raised rates by 175 basis points so
far this year -- the fastest tightening pace in Latin America
-- in a bid to curb inflation.
The bank is expected to ease the pace of rate hikes after
inflation expectations fell. The market is betting on a
25-basis-point increase when the bank meets on June 14.
The bank calculates its month-on-month IMACEC data in
seasonally adjusted terms. A monthly gauge, the IMACEC measures
more than 90 percent of the components comprising Chile's gross
domestic product, which is published quarterly.
Source: www.reuters.com
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