Chilean economy cooling to dampen inflation, says finance minister

  • World
  • Saturday, 20 Aug 2022

SANTIAGO, Aug. 19 (Xinhua) -- Chile's economy is "adjusting" to reduce inflationary pressures, Finance Minister Mario Marcel said Friday, following lower than expected growth in the second quarter of 2022.

"It is possible" the economy will enter a technical recession, he added.

Chile's economy grew 5.4 percent year on year in the second quarter, according to the Quarterly National Accounts report released by Chile's Central Bank on Thursday.

Growth in the April to June period was lower than in the previous quarter (7.4 percent) and below market expectations (5.7 percent).

"This is the adjustment needed to reduce inflationary pressures," Marcel said at a seminar in Santiago, adding that "in the last quarter of the year, we are going to see positive results."

In the meantime, "we have to make sure that this adjustment is effective and short, and that afterward we can rebalance the economy and recover our future growth potential," Marcel said.

Current inflation is far above the target range of 3 percent established by the Central Bank, and is expected to register below 13 percent in the third quarter to close at about 10 percent at year's end.

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