September 5, 2017 / 6:04 PM / 10 months ago

UPDATE 1-Chile posts strong July growth, rate cut seen more distant

(Adds analyst comment on interest rate, context; recasts headline and first paragraph)

SANTIAGO, Sept 5 (Reuters) - Chile’s economic activity rose 2.8 percent in July from the same month a year ago, the strongest growth figure in Chile in more than a year, likely easing pressure for a near-term cut in the nation’s benchmark interest rate.

The July reading came in well above a Reuters forecast for 2.1 percent growth and was significantly higher than last July’s figure, when the economy grew 1.4 percent in yearly terms.

Among the best-performing sectors was mining, as prices for copper, by far Chile’s most important export, have rallied in recent months. A range of other sectors including services, manufacturing and fishing also performed well.

Chile’s economy has been sluggish for years due to low metal prices, lagging consumer confidence and a string of corporate and political corruption scandals. In recent months, inflation has fallen below the central bank’s 2 percent to 4 percent target range, prompting some analysts to suspect the bank would initiate an easing cycle.

However the July data “on the margin pushes the balance toward waiting for more inflation news before evaluating a cut in the interest rate,” Banchile said in a note to clients.

The government welcomed the July growth figures but cautioned that the economy still faces structural headwinds.

“(There’s) a variety of signals that don’t make us feel confident, but, yes, we are hoping that the coming statistics continue along this path,” Chile’s recently installed finance minister, Nicholas Eyzaguirre, told journalists. (Reporting by Gram Slattery and Antonio de la Jara; Editing by Meredith Mazzilli)

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