Chile's cenbank trims GDP growth estimate, fuel costs set to drive inflation

SANTIAGO, March 25 (Reuters) - Chile's central bank reduced its growth expectations for the country's economy in 2026 while its inflation forecast increased amid pressures from rising global fuel prices.

The gross domestic product of the world's largest copper producer is expected to grow between 1.5% and 2.5% this year, the central bank said on Wednesday, reducing its forecast from a previous range of 2% to 3%.

The bank also raised its forecast for annual inflation in 2026 to 3.6% from a previous 2.9%, adding that it expects inflation to converge to its 3% target in the second quarter of 2027.

"For overall inflation, the revisions are concentrated in the short term and are primarily linked to the impact of the war on international fuel prices," the institution said in the report.

The bank estimated the price of copper at $5.4 per pound in 2026, up from a prior forecast of $4.7 per pound.

In the report, the institution also set its estimate for 2027 economic growth at 1.5% to 2.5%, same growth rate as it forecast for this year.

(Reporting by Fabian Cambero and Aida Pelaez-Fernandez; Editing by Andrew Heavens and Louise Heavens)