05 August 2008

Chile Second-Half Growth Will Be Better, Velasco Says

By Nathan Gill and Sebastian Boyd
     Aug. 5, 2008 (Bloomberg) -- Chile's economic growth will accelerate in the second half of the year, Finance Minister Andres Velasco said.
     ``The economy is taking off and we are going to have a second half that will be better than the first,'' Velasco told reporters today in Melipilla, Chile.
     Chile's economy expanded 5 percent in June, the central bank said today, outpacing the estimates of all 16 economists surveyed by Bloomberg. Economic activity grew 4 percent in the second quarter, compared with a 3.5 percent average in the first half of the year, Velasco said.
     The finance minister repeated promises to fight inflation, which remained at a 13-year peak in July. Core inflation in July was the fastest in more than a decade.
     Inflation is ``enemy No.1,'' Velasco said. Price rises are ``clearly still at levels that are too high, and we're going to fix this. We'll keep working for inflation to fall.''
     Analysts had trimmed June economic growth expectations to no more than 4 percent after industrial output fell for the second consecutive month, the central bank increased interest rates by half a percentage point and a strike by truckers caused shortages in mines and supermarkets. Chile's gross domestic product grew at an annualized pace of 6.2 percent in the first half, BNP Paribas SA economists wrote in a note to clients today.
     GDP growth will slow to 4.25 percent in 2008 from 5.1 percent last year, the International Monetary Fund said July 23. The median estimate of 36 economists in a central bank survey conducted on July 2 was for growth of 3.9 percent in 2008.