Economy

Chile's economy plunged in December to its worst record since the 1980s crisis

Month over month, however, the economy showed a 3.5% growth in December compared to November as economic activity resumed the monthly growth

Containers in Port of Valparaiso in Chile
Containers at the Port of Valparaiso, in Chile. Photo: Creative Commons
  • Chile’s monthly economic activity index Imacec dropped by 0.4% in December 2020 compared to the same month of 2019;
  • As a result, the country’s economy ended 2020 with a 6% preliminary drop, an unseen figure since Chile’s crisis in the early 1980s;
  • Month over month, however, the economy showed a 3.5% growth in December compared to November.

With sanitary restrictions in the last month of the year and its impact mainly on the services sector, Chile‘s monthly economic activity index, Imacec, dropped by 0.4% in December 2020 compared to the same month of the previous year, informed on Monday the Central Bank of Chile, as reported by local news outlet Diario Financiero.

As a result, the country’s economy reached the end of 2020 with a 6% preliminary drop, an unseen figure since Chile’s crisis in the early 1980s.

READ ALSO: Chilean economy grows in November for the first time since the start of the COVID-19 pandemic

Month over month, however, the economy showed a 3.5% growth in December compared to November as economic activity resumed the monthly growth it had shown from June to October when it dropped by 0.5%.

December’s result according to the Central Bank was driven by the losses in services and mining, in spite of trade’s dynamism.

Trade grew 10.8% driven mostly by retail sales and, to a lesser extent, by wholesalers. Compared to November, the sector saw a slight 0.3% upward.

READ ALSO: To get back on track, Latin America needs to find a never-before-achieved balance between structural reforms and monetary stimulus

Services sank 2.1% pushed by transportation, cultural, leisure activities, restaurants and hotels. All of them, according to the Central Bank report, were hit by the Covid-19 effects on people’s mobility and the regular operation of commercial facilities.

In the monthly comparison, the sector recorded a 7% increase compared to November.

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