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Santander See Consecutive 75bp Cuts Forthcoming

CHILE
  • Santander expect BCCh to continue with monetary easing, with the policy rate ending the year around the neutral level, although with less urgency for aggressive cuts. They foresee a 75bp cut today, followed by another 75bp move in May. Additionally, Santander expect BCCh to revise its GDP growth forecast up significantly from the 1.25% to 2.25% range estimated in December.
  • Santander note that the stronger-than-expected economic activity data in February were partly due to the extra day in the month, which according to BCCh could have contributed 1pp to growth. Beyond the effect of the leap year, the economy expanded 0.8% m/m in seasonally adjusted terms, supported by progress in all sectors, especially mining and manufacturing production.
  • They note that these figures leave activity for the year on a good footing, pointing to greater growth than initially estimated. Santander revise their projection for 2024 GDP growth to 2.8%, from 2.25%.

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