Chile’s economic activity frustrates estimates with December drop

Chile’s economic activity disappointed markets and frustrated government officials in December, posting a surprising drop on a yearly basis even after the local finance minister assured that last year’s recession had been left behind.

The IMACEC economic activity index fell 1.0% in December when compared to the same period of the previous year, the central bank said on Thursday (February 01), below all estimates in a Reuters poll of economists whose median forecast was a 0.7% increase.

Chile’s economic activity was also down 1.1% from the previous month.

See below foreign trade on Chile’s container exports and imports, according to the DataLiner maritime business intelligence service.

Chile Container Trade | Jan 2020 – Oct 2023 | TEU

Source: DataLiner (click here to request a demo)

The result contradicted projections from Finance Minister Mario Marcel, who said last week the IMACEC report for December could confirm the end of a recession as he reinforced an estimate of 2.5% economic growth for 2024.

Chile faced a sharp economic downturn in 2023 after a rapid post-pandemic recovery. The economy struggled while inflation soared, leading the central bank to hike interest rates which it has now began cutting as inflation cooled.

The year-on-year economic activity drop in December was driven by lower goods production and commerce activity, which were partially offset by an increase in service activity, the central bank said.

On a sequential basis, it added, a drop in mining activity weighed on the broader reading.

Source: Nasdaq with Reuters information

Original text: https://www.nasdaq.com/articles/chiles-economic-activity-frustrates-estimates-with-december-drop

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