Assessing Michelle Bachelet's Return To The Chilean Presidency
Chile's new centre-left government, which was inaugurated on March 11, will face a number of significant challenges in the coming months as it pursues an ambitious reform agenda predicated on raising corporate taxes, introducing higher-quality free education, and writing a new constitution. Foremost will be slowing growth, as economic activity expanded by just 1.4% year-on-year in January, marking the weakest monthly print since February 2010, and posing downside risks to our forecast for real GDP growth of 3.7% in 2014, which already implies a slowdown from estimated growth of 4.3% in 2013. Indeed, we believe that President Michelle Bachelet will face difficulty in balancing her longstanding policy aims, including support for labour unions and indigenous communities, against her imperative to protect Chile's market-friendly business environment as the economy slows. This podcast features Noah Schumer, BMI's Chile Country Risk analyst, and Ben Kutler, from BMI's global Mining team.