Market Report, "Chile Business Forecast Report Q2 2011", published

Feb. 16, 2011 - PRLog -- Life Beyond The Reconstruction    The Q1 2011 Chile Business Forecast Report highlights our positive  outlook for the country's economy, which has long been one  of our regional favourites. Ongoing reconstruction efforts following  February 2010's earthquake have seen fixed investment continue  to tick higher, and exports remain robust on the back of still robust  Chinese demand, contributing to strong GDP growth which we expect  to slow only slightly to 4.5% in 2011. We draw attention to the uptick  in tensions between President Sebasti√°n Pi√±era and congress, but  stress that this will not seriously harm Chile's underlying political  profile, particularly given an increase in government approval arising  from rescue efforts at the Copaip√≥ mine.    A significant narrowing of Chile's trade balance due to shifting import  and export dynamics has pushed the current account almost into the  red, prompting us to revise down our forecast to a deficit of 0.5% of  GDP for 2010. The country's strong FDI outlook and positive political  risk profile mean this is not currently cause for concern, but if huge  net portfolio investment shortfalls are sustained over the next 12  months there could be problems ahead for Chile's external accounts.  A n increase in short-term inflationary pressures arising from domestic  idiosyncrasies has led the Banco Central de Chile to pursue a more  aggressive rate hiking cycle, causing us to revise our end-2010  forecast for the benchmark lending rate up to 3.50%. However,  concern over the persistent rapid appreciation of the peso may be  reflected in the central bank's monetary policy decisions in coming  months, and there could be downside risk to our end-2010 interest  rate forecast. We expect inflation in the longer term to remain  contained within the upper bounds of the central bank's tolerance  range of 2-4%, suggesting that the pace of rate hikes will slow into  2011, and we maintain our below consensus forecast for the policy  rate of 4.25% for end-2011.    Although we believe President Sebasti√°n Pi√±era will continue to be  challenged by a belligerent congress dominated by the centre-left  Concertaci√≥n de Partidos por la Democracia (CPD) over the next 18  months, strong economic growth, falling unemployment and steady  inflation will work in his favour and should prevent any serious decline  in public support or political stability.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/123222_chile_business_forecast...

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

# # #

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.