CHILE POISED FOR SALES GROWTH.Chilean internal demand remains slack but low interest rates and gradual improvement in purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. will boost household expenditure during the second half of 2003. Early this year, the benchmark interest rate Benchmark interest rate Also called base interest rate, it is the minimum interest rate investors will demand for investing in a non-Treasury security. It is also tied to the yield to maturity offered on the comparable-maturity treasury security that was most recently issued (on-the-run). dropped to 2.75 percent, which was the lowest level recorded in more than two decades. Inflation of 3.3 percent this year should drop to 2.9 percent during 2004, thus removing any pressure on the central bank to boost lending rates. Spending on household services and durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. started to rebound early this year and the upward momentum should persist through the second half. During March of this year, consumer confidence dipped to the lowest level registered in two years but the improving macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. panorama should push confidence upward by years end. Unemployment of nearly 10 percent will put downward pressure on high-end spending through the remainder of this year, but increased economic activity will boost job creation by years end. Growth in high-end durables should show year-on-year growth in excess of 5 percent by the fourth quarter although that is in relation to depressed levels noted during the second half of last year. Chiles multiple free-trade agreements position it as a leading South American trade American Trade, the trade that the United States has with foreign nations or within itself. The Government actively promotes exports and seeks to prevent foreign countries from maintaining trade barriers that restrict imports. hub and that will pay off as the global economy begins to recover. Capital investment should linger below 3 percent year-on-year until the fourth quarter when it will approach the 5 percent mark. Foreign direct investment in Chile should emerge from the doldrums doldrums (dŏl`drəmz) or equatorial belt of calms, area around the earth centered slightly north of the equator between the two belts of trade winds. over the next 12 months, with gains in excess of 5 percent putting upward pressure on demand for production equipment and business services. |
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