Chilean Economy Contracts 1.2% in April, Driven by Mining Slump

Chile's economy experienced a significant contraction of 1.2% in April, the most substantial fall since March 2023, according to data released by the Central Bank. This downturn surprised markets, as it far exceeded the 0.2% decrease observed in March and was largely attributed to a steep decline in mining activity.

The mining sector, a cornerstone of the Chilean economy, saw its output drop by 11.8% compared to April of the previous year. This reduction is directly linked to lower copper production, a key export for the South American nation. Other sectors also contributed to the economic slowdown, with the broader industry sector contracting by 0.4% and the production of other goods falling by 2.3%.

In contrast, the commercial sector showed resilience, growing by 2.1% year-on-year. This growth was bolstered by positive results across all its components, with automotive trade standing out. Retail sales were particularly strong in grocery stores and online platforms, while wholesale trade saw an increase in machinery and equipment sales.

Services also expanded by 0.8%, mainly driven by personal services, especially in the health sector. However, this was offset by a decline in business services. Reflecting these economic pressures, the Central Bank of Chile has revised its growth forecast for 2026 downward, from an earlier projection of 2%-3% to 1.5%-2.5%. This adjustment is partly due to the impact of rising international oil prices on the domestic economy.