Chile will have a more expansive economic and fiscal policy in the year 2019 to stimulate the Chilean economy. The Chilean finance minister said that the country would try to bring in new reforms to stimulate economic growth.
“We are going to have a more expansive fiscal policy,” Finance Minister Felipe Larrain was quoted saying in El Mercurio. “We are thinking of additional measures to stimulate the economy.”
Like most countries in the world, the trade war between US and China has adversely affected the Chilean economy too. The new economic reforms are expected to counter the adverse effects caused by the trade war.
The country has cut its economic forecast for the year 2019 from 3.8 percent to 3 percent.
Early in 2019, Chile had cut down its interest rates by 50 basic points to 2.5 percent. Another reduction in the rates is expected by September.
The central bank had previously reported an increase in the Chilean economic activity by 1.3 percent in the month of June when compared over the same period in 2018. But the expected growth was 2.4 percent. The reason attributed to the lower than expected growth performance was the slow expansion in the country’s key mining sector.
Chile is the no.1 producer of copper globally. Earlier a decrease in copper prices and a weak demand for its products had affected Chile’s major companies such as Empresas CMPC, Copec and AntarChile. Chile entered into an agreement with China to expand its trading options and for finding a new venue for the Chilean agricultural products.