Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Economists project recession in Chile as Q2 GDP misses forecasts

Economy Aug 18, 2022 10:35AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Containers are pictured at the San Antonio port, in Chile August 6, 2019. REUTERS/Rodrigo Garrido/File Photo
 
Copper
+0.70%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Fabian Cambero and Gabriel Araujo

SANTIAGO (Reuters) -Chile's gross domestic product came in below expectations in the second quarter of 2022, central bank data showed on Thursday, leading economists to forecast a potential recession as pandemic-related stimulus is unwound.

The Andean country's economy grew 5.4% in the second quarter from a year earlier, but showed no growth from the previous three months in seasonally adjusted terms.

Economists polled by Reuters had expected a 5.7% increase year-on-year and a 0.3% rise over the previous quarter.

The performance highlighted Chile's struggle to grow as the central bank aggressively tightens its monetary policy to tame soaring inflation, which reached a near three-decade high last month.

"Chile's economy merely stagnated in Q2 and the chances are high that it will fall into recession over the second half of the year," Capital Economics' Latin America economist Kimberley Sperrfechter said in a note.

She also mentioned that building current account risks were set to keep the peso on the backfoot, with the local currency weakening 2.2% against the dollar following the latest economic figures.

The central bank said in a report that data were mixed among sectors, with personal care and transportation fuelling growth in services activities while mining and agriculture dropped on a yearly basis in the world's largest copper producer.

Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said Chile's economy performed poorly in the first half, reflecting tighter fiscal and monetary policy while domestic fundamentals deteriorated.

In the first quarter, Chile's economy had contracted 0.8% from the previous three months, losing ground after a solid recovery from the pandemic downturn last year.

"(The economy) is now practically on a technical recession," Abadia said. "The bad news is that leading indicators, including business and consumer confidence, suggest that the downtrend will continue over the coming quarters due to an array of shocks".

Economists project recession in Chile as Q2 GDP misses forecasts
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email