Chile's economy to grow near 6%

Chilean Finance Minister, Andres Velasco, expects that Chile's economy will likely expand near 6 percent in 2006, boosting revenue for expanded government social services. Minister Velasco said the economy will probably match the growth rate of the past two years, when it expanded 6.2% and 6.3% respectively, spurred by investment and record prices for copper, Chile's top export.

“The economy should continue to grow at comparable rates. Countries can grow and be competitive, and at the same time be socially responsible” Velasco said. The Chilean government wants to ensure that a seventh year of economic expansion in 2006 reaches the nation's poor.

The government plans to raise pension payments for the elderly poor and increase competition among the country's pension fund managers, which have higher profit margins than other industries, including banking, Velasco said.

As a result of the high price of copper, the trade balance is expected to reach a record surplus of US$ 19,000 million during 2006, assuming an annual average copper price of US$ 3 per pound. Under this scenario total exports would account for US$ 53,000 million and imports could reach US$ 34,000 million. Using a more conservative annual average copper price of US$ 2.6 per pound, Chile would have in 2006 a trade surplus of US$ 17,400 million.