Chile central bank chief sees slower second-quarter growth

By Anthony Esposito and Antonio De la Jara

SANTIAGO (Reuters) – In all likelihood Chile’s gross domestic product growth will be lower in the second quarter than the 2.0 percent year-on-year expansion posted in the first quarter, Central Bank President Rodrigo Vergara told Reuters on Tuesday.

Economic activity in the top copper exporter rose 1.8 percent in May from the same month a year ago due to a relatively strong performance in services and commerce, central bank data showed earlier in the day, but analysts warned the nation’s economy remained subdued.

“We already have (data) for two months in the second quarter and obviously everything points to the second quarter being lower than the first quarter,” Vergara said in an interview at the bank’s headquarters in downtown Santiago.

The bank, in its June quarterly Monetary Policy Report (IPoM), cut its 2016 gross domestic product growth projection to a range of 1.25 to 2.0 percent from a previous forecast of 1.25 to 2.25 percent, due to weakness in the key mining sector and a drop in investments.

The 1.8 percent economic activity growth in May is “a number that is perfectly consistent with our growth forecasts for this year,” said Vergara.

(Reporting by Anthony Esposito and Antonio de la Jara; Editing by James Dalgleish)