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Chile political scandals have 'contaminated' economy - Finance Minister


    SANTIAGO (Reuters) - Chile's economy has not been immune to the slew of graft allegations plaguing the political and business elite which have undermined business and consumer confidence, Finance Minister Rodrigo Valdes said late on Sunday.

    In recent months, politicians across the political spectrum have been accused of accepting illicit campaign contributions from major businesses, scandalizing CHILE (CHILE.CHL)(CHILE.CHL)(CHILE.84)ns.

    That, along with allegations that President Michelle Bachelet's son used his political connections to help his wife gain preferential access to a $10 million dollar loan and turn a quick profit on a real-estate deal, have helped drag consumer sentiment to its lowest level since Chile's 2009 recession.

    "Polls show that there was a significant deterioration (in sentiment) towards the end of the first quarter, beginning of May. And my unequivocal conclusion is that politics started contaminating the economy," Valdes said on TV Chilevision's Tolerancia Cero programme.

    "We've started a vicious cycle," he said.

    On the back of cooling domestic demand and shrinking investment, Chile's economy grew at a five-year low of 1.9 percent in 2014.

    Chile's central bank forecasts 2015 economic growth in the top copper producer at between 2.25 percent and 3.25 percent.

    (Reporting by Anthony Esposito; Editing by Nick Macfie)