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Chilean Economy Shrinks 0.1% Year-on-Year in March, First Quarter Declines
🇵🇾 Paraguay /Economy & Trade

Chilean Economy Shrinks 0.1% Year-on-Year in March, First Quarter Declines

From ABC Color · (1h ago) Spanish Critical tone

Translated from Spanish, summarized and contextualized by DistantNews.

TLDR

  • The Chilean economy contracted by 0.1% year-on-year in March, surprising economists who had predicted a slight increase.
  • This decline was primarily driven by a 5.2% drop in goods production, particularly in mining and agriculture.
  • The Central Bank revised its 2026 growth forecast downward to 1.5%-2.5%, citing the impact of rising international oil prices.

Chile's economic performance in March has presented a challenging picture, with the monthly economic activity index (Imacec) showing a slight year-on-year contraction. This downturn, particularly in the goods-producing sectors like mining and agriculture, signals headwinds that are impacting the nation's economic momentum. While services and commerce offered some compensation, the overall trend for the first quarter points to a sluggish start to the year.

The production of goods, in particular, fell by 5.2% year-on-year, a result influenced by all its components.

— Central Bank of ChileExplaining the primary driver of the economic contraction in March.

The Central Bank's revised growth forecast for 2026, now set between 1.5% and 2.5%, reflects a more cautious outlook. This adjustment acknowledges the persistent effects of global economic factors, such as the rise in international oil prices, which inevitably influence Chile's domestic economy. The previous forecast, ranging from 2% to 3%, indicated a greater degree of optimism that has now been tempered by current realities.

In mining, there was a lower extraction of copper, while in other goods, the fall was explained by agriculture-forestry and extractive fishing.

— Central Bank of ChileDetailing the specific components contributing to the decline in goods production.

Despite these figures, it is important to note the resilience shown in certain sectors. Commerce, for instance, saw positive growth, with wholesale trade boosted by machinery and equipment sales. Retail also demonstrated strength, with notable increases in grocery sales, apparel, and online platforms, alongside growth in automotive services. These pockets of activity highlight the varied performance across the economy and suggest that while challenges exist, certain areas continue to contribute positively.

Commerce presented a variation of 5.1% year-on-year, with positive results in all its components, highlighting the growth of wholesale trade, which was driven by sales of machinery and equipment.

— Central Bank of ChileHighlighting positive performance in the commerce sector.
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Originally published by ABC Color in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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