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Chile's economic activity down sharply amid crisis

AFP  |  Santiago 

Chile's economic activity fell 3.4 per cent in October, as a prolonged bout of social unrest battered commerce and services, the central bank reported Monday.

The sharp drop in the bank's monthly index of economic activity was far greater than the 1.0 per cent anticipated in official estimates, and was the worst performance since 2009 at the height of the global economic crisis.

"Economic activity during the month was affected by the drop in services, commerce and manufacturing," the bank said.

Protests erupted in Chile on October 18 over metro fare hikes and quickly escalated into the most severe outbreak of social unrest since the end of the dictatorship of Augusto Pinochet in 1990.

Mining activity -- Chile accounts for nearly a third of the world's copper production -- grew by 2.0 per cent, but non-mining sectors contracted by 4.0 per cent, the bank said.

In the third quarter, Chile's gross domestic product was up 3.3 per cent. But the crisis has put in question official estimates of two per cent growth for the year.

With the markets unsettled, the central bank on Thursday announced it was intervening in the foreign exchange markets to support the peso, which last week fell to a historic low of 828.36 to the dollar.

On Monday, the peso was trading at slightly below 800 to the dollar after the market opened.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 02 2019. 23:05 IST