Thursday, Sep 16, 2021
International Finance
Economy Featured

Chile expects to come close to 6% GDP contraction: OECD

Chile contraction_IF_Image
In October, the Chilean economic activity dropped 1.2 percent from a year earlier

Chile has experienced months of contraction triggered by the coronavirus pandemic. In fact, the country is expected to come close to a 6 percent gross domestic product contraction this year, according to the Organisation for Economic Cooperation and Development (OECD). 

In October, the Chilean economic activity dropped 1.2 percent from a year earlier, according to the  Central Bank of Chile. 

The  Central Bank of Chile’s Monthly Economic Activity Index (IMACEC) has nearly 90 percent of the economy to its gross domestic product figures, media reports said. It appears that the figures recorded in October was the country’s best report since February this year, with the economy climbing 3.3 percent. 

However, it is reported that in the third quarter of the year, its economy dipped 9.1 percent compared to the same period last year. The Central Bank of Chile said there was a small contraction compared to the 14.5 percent drop recorded in the second quarter of the year. 

The pandemic has forced Chile to witness worse conditions for activities such as personal services, construction, transportation, restaurants and hotels and business services.

The OECD’s has predicted a 4.2 percent growth in a gradual economic recovery that is expected to last over the next two years. This will be based on household consumption and a progressive improvement of the labor market, and a lot will depend on how the pandemic will shape up. 

The OECD has also pointed out that Chile has suffered its worst economic downturn since 1982, with a 25 percent unemployment rate.

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