SANTIAGO (Reuters) - Chile’s economy will grow 2.9 percent in 2018 and 2019 as copper prices rebound and investment recovers gradually, the Organization for Economic Co-operation and Development (OECD) said in a report published on Monday.
That represents an improvement on economic expansions of 1.5 percent and 1.7 percent in 2016 and 2017, respectively, when weak copper prices contributed to a deceleration in the South American country’s growth rate, according to the OECD.
The report also projects that Chile’s fiscal deficit will fall to 1.9 percent of gross domestic product (GDP) in 2018 and 1.7 percent in 2019, down from 2.8 percent in 2017. It recommends that to sustain growth, Chile should diversify its economy beyond activities related to natural resources.
Inflation expectations in Chile remain well-anchored, meaning monetary policy is likely to remain accommodative in 2018, according to the OECD.
The OECD report, presented by the organization’s secretary general Angel Gurria in Santiago, comes days before President-elect Sebastian Pinera, a conservative billionaire who has pledged to slash red tape and revive investment, is set to take office in the world’s No. 1 copper producer.
Reporting by Cassandra Garrison; Writing by Luc Cohen; Editing by Nick Zieminski