Chile’s economy contracted 2.5% in November 2022 due to a drop in trade

The Chilean economy contracted 2.5% in November 2022 compared to the same month in 2021 due to the drop in trade and the manufacturing industry, the biggest setback since January 2021, the Central Bank reported on Tuesday.

The Monthly Index of Economic Activity (Imacec) for November 2022 “fell 2.5% compared to the same month of the previous year,” on the other hand, “the seasonally adjusted series decreased 0.8% compared to the previous month,” the institution said in a statement.

This index, according to the Central Bank, is explained “by the fall in trade and the manufacturing industry.” Meanwhile, the decrease in the Imacec in seasonally adjusted terms “was determined by the performance of mining.”

The figure was within the expectations raised by analysts, who estimated a year-on-year decrease of between 2% and 3.5 percent.

This is the third consecutive month in which Chilean economic activity has registered a drop, but it is the most pronounced since January 2021 when it was 3.1%. That month, Chile felt the impact of the restrictions imposed by the coronavirus pandemic.

According to the Economic Commission for Latin America and the Caribbean (Cepal), Chile and Haiti will be the only countries in the region that will register a contraction of the Gross Domestic Product (GDP) in 2023: 1.1% and 0.7%, respectively.

For 2022, the Central Bank of Chile adjusted the GDP growth projection downward, going from a range of 1.75%-2.25% to 2.4%. For 2023, the BC forecasts an economic contraction.