Chile's economy shrinks 0.9% in May, marking fifth consecutive monthly fall

Chile's economy contracted by 0.9% in May, extending a streak of negative performance to five months, according to the Central Bank. The decline, measured by the Monthly Economic Activity Index (Imacec), was largely attributed to a significant slump in the mining sector, especially copper.

Production of goods fell 4.7% year-on-year, with mining, particularly copper, being the main driver. Industrial production also saw a decrease, linked to reduced processing of fishery products. The seasonally adjusted Imacec contracted 0.2% compared to the previous month and 0.7% over twelve months.

However, the non-mining Imacec, which excludes the country's primary export, grew 0.7% annually. Seasonally adjusted, it fell 0.3% from the prior month but rose 1% over twelve months. In April, Chile's economy had contracted by 1.2% year-on-year, the steepest drop since March 2023.

The economic woes are compounded by rising unemployment. The National Statistics Institute reported that the jobless rate hit 9.4% in May, its highest level in five years. The Central Bank has moderated its growth expectations for the year, forecasting a GDP expansion of 1% to 1.75% in 2026.