Bernama reported that Chile is planning a 2013 budget with a tendency growth of 5% and an average long term basic copper price of USD 3.06 the pound.

This was revealed by Mr Felipe Larrain finance minister of Chile together with Ms Rosanna Costa head of the Budget Office during a presentation before Congress.

Addressing the finance and budget committees ahead of the formal presentation of the budget bill that is to be discuss next month the two ministers said that the hypothesis are based on the estimates from the GDP Tendency Consulting group and the long term price of copper, the country's main export.

Mr Larrain said that "Currently the GDP tendency stands in the range of 5%, according to the experts' estimate and our challenge will be to attract more investment and improve productivity so we can speed growth and the GDP. The 3.06 dollars the pound for copper is a few cents higher than last year USD 3.06.

The Central bank announced that Chile's seasonally adjusted economic growth picked up in the Q2 from the Q1 to 1.7% buoyed by domestic demand. The economy of the world No.1 copper producer expanded 5.5% in the Q2 as expected, from a year earlier propelled by domestic demand, which rose 7.1%.

Chile's export dependent economy is bracing for fallout from the Euro zone's sluggish economic growth and a cooling in top trade partner China but many in the financial markets here do not see the central bank cutting interest rates soon due to solid local growth and easing inflation.

The bank said that all the economic sectors grew, though services, retail and construction can be highlighted. In terms of trade, exports showed a small increase, in contrast with dynamic imports. In addition to producing around a third of the world's copper, Chile exports wine, wood, fruits and salmon which makes it particularly at risk from softening global demand.

Source - Bernama

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