Investing.com — Chile’s central bank released its December Monetary Policy Report, projecting economic growth between 1.5% and 2.5% for 2025 and 2026. This follows the country’s 2.3% economic expansion this year. . The report says that these forecasts of increased public spending and a greater contribution from the external sector, are balanced by reduced stimulus for household and business demand.

The bank’s report showed that economic growth this year was at the low end of the previously estimated 2.25-2.75%.

In terms of inflation, the bank estimates that the annual rate will close this year at 4.8%, and end 2025 at 3.6%. In early 2026, it is expected that the inflation rate will ease to the target of 3%. The report acknowledged that inflation is currently higher than expected a few months ago, attributing it to factors such as the global appreciation of the US dollar and an increase in local labor costs.

The central bank also announced on Tuesday that it had lowered its key interest rate by 25 basis points to 5.0%. It stated that the short-term risks for inflation are leaning upwards, requiring caution.

The report suggests that in the medium term, a weaker outlook for domestic demand should ease cost pressures.

In addition, the bank projects the price of , which is Chile’s main export, to be $4.20 per pound in 2025 and $4.30 in 2026.

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