UPDATE 2-Chile cenbank cuts 2014 growth outlook, raises inflation view

lunes 16 de junio de 2014 12:43 GYT

(Adds central bank comments on interest rate, current account)

By Antonio De la Jara and Anthony Esposito

SANTIAGO, June 16 (Reuters) - Chile's central bank on Monday cut its 2014 growth forecast and raised its inflation view, as widely expected, following months of economic sluggishness with inflation recently jumping above a five-year high.

In its quarterly Monetary Policy Report (IPoM), the bank reduced its forecast for gross domestic product growth this year to a range of 2.5 percent to 3.5 percent, from prior guidance for 3.0 percent to 4.0 percent, in line with a Reuters poll.

"In recent months, activity and demand have continued to decelerate ... along with investment, which has been dragging for some months, there is now also weaker private consumption," the central bank said.

However, the bank sees the economy slowing picking up in the latter half of the year as investment begins to recover.

The bank also increased its 2014 inflation forecast to 4.0 percent from 3.0 percent.

Inflation reached an annual level of 4.7 percent in May, well above its 2 percent to 4 percent target, but the bank reiterated the rise will likely be temporary due in part to a slowing economy.

A sharp depreciation of Chile's peso currency versus the U.S. dollar has made imports more expensive, fueling inflation.   Continuación...