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Chile economic activity growth -0.97% y-o-y in Jun-23

- Chile's economic activity in June 2023 improved slightly with a year-on-year growth rate of -0.97%, which is the highest since February 2023.
- However, this growth rate remains 4.58 percentage points below the long-run average, indicating that the country's economy is still below its historical trends.

Banco Central Chile: Jul-23

• The Central Bank of Chile executed a larger-than-anticipated 100 basis points cut to the monetary policy interest rate, driven by factors such as declining international and domestic inflation, and changing commodity prices.
• Domestic financial markets are responding to expectations of eased monetary policy with falling short-term interest rates and a depreciating exchange rate, despite weak bank credit and stable long-term rates.
• Future decisions regarding the reduction of the MPR will be carefully based on the evolution of the macroeconomic scenario and its implications for the trajectory of inflation.