* An International Monetary Fund (IMF) mission has visited Chile for discussions with the government on recent economic developments, the coronavirus (Covid-19) pandemic, the war in Ukraine, and their implications for the country’s policy priorities. At the conclusion of the visit, which took place from 21-25 March and follows the assumption of office earlier this month of the new leftist government led by President
Gabriel Boric, the mission chief
Ana Corbacho said: “
We welcome the Chilean authorities’ far-reaching reform agenda, which aims to tackle inequality, protect the most vulnerable, and foster a green economy while maintaining macroeconomic stability and fiscal sustainability”. She noted economic recovery is underway following a GDP contraction of 6% in 2020, with GDP up by 11.7% in 2021, buoyed by “
a large and coordinated policy response, widespread vaccination, and high copper prices”. She also said that “
the central bank has appropriately responded to inflationary pressures by rapidly increasing the monetary policy rate”. According to the IMF, inflation, buoyed by a surge in domestic demand, global supply constraints, and high commodity prices, reached 7.8% in February, with two-year inflation expectations edging up to 3.7%.
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