Central Bank of Chile reduces estimated economic growth in the country
The Central Bank of Chile has reduced its growth estimate for this year by 1% on Thursday, due to the impact of the social crisis. In a new Monetary Policy Report (Ipom), the BC estimated an annual fall of 2.5% in the fourth quarter of the year, leading to a review of growth in 2019 to 1%. This rate is considerably lower than expected in September (2.25%).
By 2021, however, the Chilean Central Bank expects "a recovery of growth as a product of a gradual recovery of the main components of spending and production", with expansion of between 2.5% and 3.5%. Accordingly, it is estimated that "by the end of 2021, the level of GDP will be about 4.5% lower than what would have been achieved without these disruptions." The document also points to a rapid deterioration in the labor market, with an unemployment rate expected to rise by 10% by early 2020. The expected investment rate for 2020 has also corrected downwards, projecting a drop of 4% per year.