Chile central bank cuts 2026 GDP forecast, slightly raises inflation view

SANTIAGO, June 17 (Reuters) - Chile's central bank on Wednesday lowered its 2026 economic growth forecast to between 1.0% and 1.75%, from the 1.5%-2.5% range projected in March, citing weaker-than-expected first-quarter activity.

The bank said the downgrade was driven mainly by poor performance in natural resource-related sectors, including copper mining, agriculture and fishing, as well as weaker inbound tourism during the summer.

-- For 2027, the bank raised its GDP growth forecast to 2.0%-3.0%, from 1.5%-2.5%, supported by a better outlook for investment.

-- The central bank also slightly raised its 2026 average inflation forecast to 3.7% from 3.6%, while its forecast for year-end inflation increased to 4.2% from 4.0%.

-- It said consumer prices had risen quickly in recent months due to higher fuel costs linked to the Middle East conflict, though inflation is still expected to return to around the 3% target in the second quarter of 2027.

-- "The conflict in the Middle East has not been definitively resolved, and global oil supply has not returned to normal," the bank said.

-- The bank also raised its copper price forecasts for 2026-2028, projecting prices of $5.8 per pound in 2026, $5.2 in 2027 and $5.0 in 2028, citing stronger effective prices and solid global demand. (Reporting by Fabian Cambero; Writing by Aida Pelaez-Fernandez; Editing by Kylie Madry)