Macroeconomic Forecast Chile

Following the Banco Central de Chile's decision to hike the benchmark interest rate by 50 basis points to 1.50% on July 15, we believe the central bank will continue tightening monetary policy through H2, with our forecast for rates to rise to 2.50% by end-year remaining unchanged. Given our core view that the central bank has not yet adequately factored in the impact of a marked slowdown in Chinese growth on the Chilean economy, we are content to maintain our below-consensus interest rate forecasts, and highlight local debt as a potentially attractive opportunity for investors over the medium term.

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