Chile Raising Growth, Copper Price Estimates, Larrain Says

Chilean government advisers raised their estimates for copper prices and economic growth, enabling the government to spend more on education and social programs next year, Finance Minister Felipe Larrain said today.

Independent experts convened by the government every year to develop forecasts for the fiscal budget raised their estimates for non-inflationary growth to 4.9 percent for 2012 from 4.8 percent in 2011, Larrain said at a forum in Santiago. Experts also raised copper price estimates used to forecast government revenue to $3.02 a pound from this year’s $2.59 a pound, he said.

The estimates will allow the government to increase spending on education without abandoning its commitment to austerity that has made Chile Latin America’s only net creditor, Larrain said. The value of Chile’s sovereign funds, which were $18 billion in July, will continue to grow, though the government may tap them if the global outlook worsens, he said.

“We will introduce an undoubtedly responsible budget that meets our objectives and the government’s commitments,” Larrain told reporters after his speech. “The budget won’t include the contingency plan. We’re developing a plan that we will unveil if the circumstances merit; in fact, we’d like to not have to use the contingency plan at all.”

Copper rose 0.3 percent to $3.735 a pound at 10:23 a.m. New York time from yesterday.

Chile’s government is scheduled to present its budget proposal to Congress this month. Students who have been protesting for more than three months will stage a march tomorrow to pressure authorities for spending increases to improve the quality and cut the cost of schooling.

To contact the reporter on this story: Randall Woods in Santiago at rwoods13@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.