SANTIAGO: Chile hopes to grow above 4 percent this year, as euro zone debt woes hurt prices for top export copper, industrial demand and liquidity and credit in the financial system, Finance Minister Felipe Larrain told a local paper's Sunday edition.
Robust growth in the world's top copper exporter is moderating, and the central bank unexpectedly cut its key interest rate for the first time in 2-1/2 years on Thursday to 5 percent, citing an economic slowdown in Europe.
"We assume that growing 5 percent is more demanding and less likely, but we're hoping to grow above 4 percent," Larrain told daily La Tercera, in reference to previous forecasts for 5 percent expansion in 2012.
Chile's central bank last month cut its forecast for 2012 expansion to between 3.75 percent and 4.75 percent, compared with a previous outlook for growth of 4.25 percent to 5.25 percent.
Chile could collect more under a coming tax reform, Larrain added, but precise numbers are still under study.
"It will be an ample and comprehensive reform of the Chilean tax system that seeks to close loopholes lower certain taxes, raise others and (create) some new ones, such as environmentally friendly incentives," Larrain said.
Chilean President Sebastian Pinera said last month that large companies "have to make a greater contribution" to a more equitable tax system that will seek to foster growth of small and medium-sized companies. Deeply unpopular Pinera has grappled for months with unrest over his conservative policies as Chileans demand more social spending and benefits.
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