Chile: Business confidence deteriorates further in Q3
October 8, 2014
In Q3, the business confidence index (IEE, Indice de Expectativas Empresariales) produced by the Santiago Chamber of Commerce (Camara de Comercio de Santiago) fell from the 54.3 points recorded in Q2 to 52.6 points. As a result of the drop, the index now stands at its lowest level since Q1 2009 and is closer to the 50-point threshold that separates optimism from pessimism. Business sentiment has been mainly affected by the recently introduced tax reform, which increased corporate taxes from the current 20% to 27%.
The drop in Q3 also resulted from a deterioration in firms’ outlook on the services and commerce sectors. According to the Chamber of Commerce, businesses’ expectations regarding future investment were at the lowest level since Q1 2009, which matched the level observed in the previous quarter. In addition, expectations regarding future sales and expected employment deteriorated over the previous quarter and reached the lowest values on record.
Author: Dirina Mançellari, Senior Economist