Business climate is less pessimistic in Chile, but concerns persist

The business climate in Chile is a little less pessimistic than a few months ago, with a less intense than expected economic adjustment process, although uncertainty persists about when there will be a rebound, a Central Bank report showed on Tuesday.

The May Business Perception Report (IPN) indicated that the proportion of companies that declare investment plans for this year is lower than in previous years, but that this contrasts with a higher percentage of companies that indicate certainty regarding the realization of planned investments.

“Among those interviewed, the perception of a deterioration in business performance persists. However, they indicate that the adjustment has been slower and smoother than expected. This contrasts with respect to the last two IPN, which reported a more general pessimismthe report said.

The companies consulted for the report anticipate that the adjustment will continue for the remainder of the year, with a rate similar to that currently observed, while for 2024 they point to greater optimism compared to previous reports, which would also be expressed in a labor market. that stops deteriorating.

In the current scenario, on the other hand, “it is observed that the price increases have continued to subside compared to previous reports”, what happens in a context “where sales levels have been reduced and costs continue to rise, although with less intensity than in previous months, which has once again led to narrow profit margins”.

The main action to face this narrowness is the search for less expensive suppliers. Other actions, less popular than a year ago, are increasing sales prices, reducing infrastructure costs and reducing staffing.

Regarding sales and forms of payment, the interviewees report that the use of payment in installments has increased, while companies in the banking sector and retailers report an increase in requests for increases in credit lines and credit card quotas. credit.

“However, the approval of these requests has been restricted, due to the fact that they have observed an increase in the total delinquency of their clients.the report said.