August 19, 2019 / 1:12 PM / a month ago

UPDATE 1-Chile says economy grows 1.9 pct in Q2 of 2019

(Updates with context, central bank and government predictions, PIX available)

SANTIAGO, Aug 19 (Reuters) - Chile’s gross domestic product grew 1.9 percent in the second-quarter of 2019 compared with a year earlier, the central bank said on Monday, as slumping global trade and falling copper prices continue to take their toll.

Chilean officials have been downgrading expectations for growth for months amid a mining slump that has dragged on exports from the world’s top copper producer.

The government said in July it expects GDP growth to hit 3.2% in 2019, down from a previous estimate of 3.5% in April.

In June, Chile’s central bank unexpectedly slashed the benchmark interest rate by 50 basis points to 2.5%, citing global trade tensions. Analysts expect another rate reduction in September.

Chile’s all-important mining sector was hit earlier this year by unusually heavy rains in its copper-rich northern desert and a two-week strike at Codelco’s Chuquicamata copper mine, one of the world’s largest.

The administration of center-right President Sebastian Pinera has planned nearly $1.5 billion in public spending in an effort to boost growth in the second half of 2019.

Reporting by Dave Sherwood Editing by Nick Zieminski

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