LatinNews Daily - 29 March 2022

In brief: IMF welcomes Chile’s ‘far-reaching reform agenda’

* 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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