MercoPress. South Atlantic News Agency

Chilean economy contracts 3.5% in March over a year ago

Finance Minister Ignacio Briones said in a statement the figures were as expected but the crisis was “transitory.”

Chile’s economic activity dropped 3.5% in March from a year earlier, the central bank said. The bank’s IMACEC economic activity index declined 5.7% compared with the previous month, as the country went into an economic and social shutdown after the arrival in Chile of the new coronavirus.

Finance Minister Ignacio Briones said in a statement the figures were as expected but the crisis was “transitory.”

“That is the glass half full that one never has to lose sight of. We have months ahead that are going to be very difficult and hit us hard, but we have to see the light at the end of the tunnel,” he said.

Briones highlighted finance ministry projections which see a 2% drop in economic activity this year, with growth in negative territory for the first three quarters and edging into positive territory in the final quarter.

Analysts Banchile Investments suggested April’s economic activity index could drop by between 8% and 11%.

The decline in economic activity in March comes after a 2.7% rise reported in February as Chile’s economy rallied after months of protests against inequality that started in October and saw thousands rally in marches but also shops being shuttered, looted and burned down.

Mining activity increased 0.8% in March, while non-mining activity declined 4%, the bank said.

“In this context, the activities most affected were services and commerce. In services, the drop in education, transport and restaurants and hotels stood out,” the agency said in a statement.

Chile, the world’s largest copper producer, is a hair´s breadth from registering 20,000 confirmed cases of the virus, with 260 dead and 10,041 recovered from the virus.

The Imacec index encompasses about 90% of the economy tallied in gross domestic product figures.