LatinNews Daily - 02 February 2024

In brief: Chile’s gov’t downplays drop in economic activity

*Chile’s central bank (BCCh) has released its monthly index of economic activity (Imacec) for December, which shows a yearly drop of 1% and 1.1% decrease in monthly terms. According to the BCCh, the yearly drop in December was driven by decreases in the production of goods (-3.2%) and trade (-3.8%), which were somewhat offset by the increase in services (+1.8%). The non-mining Imacec also registered decreases of 0.5% in both annual and monthly terms. Chile’s Finance Minister Mario Marcel noted December’s Imacec was “unexpectedly negative, below market expectations” but stressed that this “does not change the reading for the year”. He said the decrease reflected a drop in activity of various productive sectors but that economic activity for the fourth quarter of 2023 was expected to register an increase in quarterly and yearly terms. “For the year as a whole, we have a slight negative variation that, nevertheless, is consistent with what we have been signalling given that 2023 was a year in which the economy underwent a very deep adjustment, which allowed for a drastic reduction in inflation, and which did not translate into a recession, let alone a serious recession as was often forecast,” said Marcel.

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