Chilean economy falls more than expected in August and declines 0.9% year-on-year

The chilean economy fell in August more than the markets expected and fell 0.9% year-on-year mainly due to the services sector, the central bank.

The Monthly Indicator of Economic Activity (Imacec), which is an advance estimate and represents close to 90% of the Gross Domestic Product (GDP) of the South American country, fell 0.5% in seasonally adjusted terms compared to July.

“The annual variation of the Imacec was explained by the fall in services, partially offset by the production of goods. Meanwhile, the negative result of the seasonally adjusted Imacec was determined by the performance of the services“said the issuer in a statement.

Services fell 1.2% in annual terms, due to business services, education and transportation, while trade decreased 1.9%.

The production of goods, for its part, grew 2.1% due to the increase in other goods, mainly due to the added value of electricity generation, mining and industry, the agency added.

He Imacec recorded an increase of 1.8% in July, its first year-on-year advance after five consecutive falls.

The chilean economy It recovered faster than expected after the pandemic, with a historic increase of 11.7% in 2021, but in 2022 it began to slow down and closed with a growth of 2.4%.

Given the risk of cooling the economy too much, the issuer decided in July to start a cycle of monetary relaxation and the current interest rate, which is at 9.5%.