Chile growth, jobs face global turmoil risks

SANTIAGO: Chile's growth and employment face risks from global financial turmoil and any strong downturn will have an impact on the local economy, Finance Minister Felipe Larrain said on Monday.

Larrain repeated that Chile's economy was strong but not immune to a global economic slowdown, adding that inflation was evolving positively.

"If there is a complex global situation, it's undoubtedly going to have repercussions here," Larrain told Chilean radio Cooperativa on Monday morning.

"Growth and employment, which are very strong, which are doing well, is where we have the most risk," he said.

Chile's economy grew 1.4 percent in the second quarter from the first quarter, slowing from a revised 1.6 percent rate in the immediately prior quarter, data showed on Thursday, reinforcing views that growth in one of Latin America's most solid economies was moderating.

Chile's central bank held its benchmark rate steady on Thursday for a second month running as inflation expectations ease, local growth moderates and the global outlook darkens, boosting bets that it has ended its rate hike cycle early.

The central bank said monetary policy changes would depend on macroeconomic conditions abroad and at home, and Larrain said on Friday the bank was now as likely to cut its rate as raise it.

Copyright Reuters, 2011