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Chile Economic Activity May 2023

Chile: Economic activity drops at sharpest rate since December 2022 in May

Economic activity declined 2.0% year on year in May (April: -1.1% yoy). May’s result marked the worst reading since December 2022. The figure was largely due to a deterioration in the mining sector, which contracted at the fastest pace since July 2022. In contrast, non-mining activity fell at a softer rate.

On a seasonally adjusted monthly basis, economic activity fell at a sharper rate of 0.5% in May (April: -0.1% mom), the worst result since November 2022 and the fourth consecutive monthly contraction. Meanwhile, the trend pointed down, with the annual average variation of economic activity coming in at minus 0.7% in May, down from April’s flat reading.

On the outlook, Goldman Sachs’ analysts said:

“A very restrictive monetary stance, tighter global financial conditions, a weaker external backdrop, and domestic policy uncertainty continue to be headwinds for activity in the near term. The central bank will soon embark on a cutting cycle, but we expect policy to remain restrictive for an extended period.”

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