The poor performance of Chile’s economy in Q2 has prompted us to revise down our already below-consensus growth forecast to just 0.5% this year. And while we expect a modest pick-up in growth over 2027-28, to 2.0-2.3%, that still implies Chile will fare poorly over the next 18 months, both relative to its own track record and growth in other major economies in the region. Despite the weakness of the economy, we don’t think the central bank will have room to cut interest rates.
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