Significance: The trouble for the Bachelet administration is that the political ‘noise’ surrounding campaign financing irregularities and corruption allegations of recent months has affected its credibility and popularity at a time when the economy faces, as Valdés conceded, “many challenges”. The governor of the central bank, Rodrigo Vergara, has said the economy is in a fragile state and cut the annual growth forecast a quarter of a percentage point to a range of 2.25%-3.25%, while the finance ministry slashed its growth forecast from 3.6% to 2.5% last month. Valdés said that Chile was well equipped to weather adverse external developments, such as the fall in copper prices, but he admitted it would be very difficult for the government to meet Bachelet’s electoral manifesto promise to deliver 5% average GDP growth for her term in office.
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