Energy Shortages Weigh On Growth

Chile's drought and gas shortages have taken their toll on the economy's output during the first three months of 2008. Although recent rainfall suggests that a mild recovery for manufacturing may be on the cards over the next few months, we note that the risk of new strikes in Chile's mining sector and ongoing supply-side energy concerns will keep economic growth subdued this year. Government spending plans, while supportive of further growth, will take some time to bite.

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