Tuesday, July 5, 2022

Chile’s economy hits another historic low in May

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SANTIAGO (Reuters) – Chile’s economic activity fell by 15.3% in May from the same month a year ago, the central bank said on Wednesday, hitting yet another historic low as measures to contain the spread of the coronavirus left many out of work and businesses shuttered.

The bank’s IMACEC economic activity index encompasses about 90% of the economy tallied in gross domestic product figures.

The May statistic follows a similarly dire result in April, when Chile´s economy plunged 14.1%. Both represent the index´s steepest year-on-year drops in at least 34 years.

The pandemic has exploded across much of South America in recent weeks. Chile has logged nearly 280,000 total cases of the coronavirus and more than 5,500 deaths, prompting health officials to lock down more than half its population to stem the spread of the disease.

Finance Minister Ignacio Briones called plunging output “monumental” but said it had still beaten market expectations. A Reuters poll had predicted a fall of 16.6%, while some economists saw an even steeper drop approaching 20%.

“We are going to have a very important fall, probably worse than this one in June,” Briones said in a radio interview.

The world´s top copper producer has thus far managed to protect its output of the red metal, the bank data showed. Mining activity grew 1.2% in May, even as non-mining output plunged 17%, according to its figures.

“The activities most affected were services and commerce, and, to a lesser extent, manufacturing and construction. In services, the drop in education, transportation, business services, and restaurants and hotels stood out,” the bank said in a statement.

(Reporting by Dave Sherwood; Editing by Andrew Heavens and Jonathan Oatis)

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