September 02, 20 - 3:37 pm - Reuters

Chile central bank softens 2020 recession projection and expects stabilization

Chile’s central bank softened its prediction for an economic contraction in 2020 due to the impact of the coronavirus on the world’s top copper producer to between -4.5% and -5.5% from the -5.5% and -7.5% contraction it foresaw in June.

The bank said a “sharp fall” in the economy that coincided with the arrival of the virus in the second quarter had been followed by “signs of stabilization” as some sectors rallied gradually and others declined by a lesser amount than previously.

In its quarterly economic report, known as IPOM, the bank added that the gradual easing of lockdowns and “support for household income” had helped bolster the flailing economy.

The Chilean government has announced relief measures, including one-off cash handouts, loans and mortgage deferrals for hard-hit citizens. And a law to allow eligible individuals to withdraw 10% of their pensions early also brought an injection of liquidity. So far, $12.606 billion has been withdrawn by almost half the population.