Chile: Business confidence deteriorates further in Q4
January 19, 2015
In Q4, the business confidence index (IEE, Indice de Expectativas Empresariales) produced by the Santiago Chamber of Commerce (Camara de Comercio de Santiago) fell from 52.6 points recorded in Q3 to 51.8 points. As a result of the drop, the index now stands at its lowest level since Q4 2008 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 as well as by the deteriorating economic prospects.
The drop in Q4 came on the back of a deterioration in firms’ outlook on the services and industry sectors. On the other hand, firms in the commerce sector were slightly more optimistic compared to the previous quarter. 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