Level of uncertainty low but continues to be important in the business climate in Chile

Uncertainty remains important for the business climate this year in Chile despite the fact that it has reduced compared to the end of last year, with concerns about inflation and investment plans awaiting political definitions, said a report. of the Central Bank of Chile (BCCh).

At Business Perception Report February, the companies consulted report that a stabilization or moderate decrease in their performance has been observed, in a scenario where demand has stopped increasing with the same force as in previous quarters and where cost pressures continue to be significant.

Some of those interviewed expect the momentum of the economy to decline towards the second half of this year.

“Although uncertainty has been reduced compared to the end of 2021, it is still important and continues to affect the perception of business performance, inflation and investment plans”, said the report.

“The companies continue to highlight the relevance of the cost pressures they are facing, and indicate that this is one of the main factors behind the increase in their prices.”.

Chile is currently facing a turbulent political climate, with an assembly seeking to draft a constitution to replace the current one – inherited from the dictatorship – and a new government headed by leftist Gabriel Boric due to take office in March.

“The interviewees indicate that the investment projects were maintained or cut for the medium term, because, although the uncertainty has been giving way, they are waiting for more specific definitions at the political-legislative level to undertake larger projects.”, said the report.

“Those consulted indicate that 2022 is anticipated with few new initiatives and current projects are mainly aimed at automation, compliance with environmental regulations and replacement of machinery”.

The evolution of the coronavirus pandemic has once again been a matter of concern in recent weeks, although the rise in infections is not expected to affect businesses in the same way as it did in the toughest moments of the health crisis. .

Likewise, companies indicate that they continue to have problems filling their available vacancies, especially in sectors such as agriculture, construction and tourism. Faced with this, in some cases it has been decided to automate processes to dispense with this workforce, increase salaries or simply not hire.