Chile lowers GDP forecast

Chile's government expects the country's economy to expand 1.5% this year.

The figure is down from a previous forecast of 2.25% made in 2016. Last year the Chilean economy - hit by lower commodity prices - expanded 1.6%, its slowest pace since 2009.

Finance minister Rodrigo Valdés (pictured), speaking before a parliamentary committee on Monday, said achieving 1.5% would require a strong performance by the economy this half.

He cited the impact of a 43-day strike at the Escondida copper mine - the world's biggest - earlier this year.

Valdés also said markets had "full confidence in our fiscal strategy."

Internal demand is forecast to grow 2.5% this year and annual inflation to come in at 2.6%, within the central bank's 2.0-4.0% target range.

Chile's economic activity increased in May for the second month in a row, according to the central bank's IMACEC monthly indicator, presenting a seasonally adjusted 0.5% increase over April.

In a June report, rating agency Moody's said: "Looking beyond 2017, we expect Chile's growth rate to increase to above 2% and gradually move towards the estimated potential growth rate of 3%. This recovery will be partly influenced by this year's presidential elections, which could play a pivotal role."