Chile, often contemplated as the most prosperous LATAM economy having had the highest nominal GDP per capita in South America, had been met with an escalation in recession-murmur on Friday, as Chilean economy had contracted by the highest pace in more than two years over third quarter following a rapid post-pandemic recovery.
According to Chilean Central Bank data, the LATAM economy with a high human development index shrank by 1.2 per cent over the second quarter, marking off the largest decline since second quarter of 2020. Economy of Chile, the world’s largest copper producer, had contracted by as much as 13 per cent over the second quarter of 2020, In the matter of the fact, the economy of Chile had recovered from pandemic-restriction led downturn rapidly as beforementioned, however, latest setback in Chilean economy came forth as the LATAM economy has been grappling with a sky-scrapping inflation-surge alongside an aggressive rate-hike policy from the country’s Central Bank which eventually had torn apart both small-scale and corporate entities.
At this standpoint, Chilean Central Bank’s benchmark borrowing cost stood at 11.25 per cent.
Chilean GDP slows by the most in two years
Nevertheless, the Andean country’s central bank had told that the latest backlash in Chilean economy had stemmed from a worsening mining activity alongside a sharp depreciation in exports over recent months.
Meanwhile, citing that the Chilean economy has been facing off a flurry of fundamental issues including an elevation in political uncertainty alongside a tightening of the Central Bank’s fiscal policy among others, an economist at Pantheon Macroeconomics, Andres Abadia said, “he economy is shrinking, and the near-term outlook remains negative”