Chile's economic slowdown sparks concerns of imminent recession

Posted on October 6, 2023   |  

Chile's economy faced a surprise setback in August, contracting by 0.5% when a small gain was expected.

This year, the nation grappled with challenges, including high-interest rates, increased inflation, and uncertainties in key trading partnerships.

Although Q2 saw an economic downturn, Chile is on a path to a gradual recovery, with a projected 2% growth in 2024.

The Chilean peso lost value against the US dollar and expectations for interest rates decreased.

In August, certain sectors, like services and mining, saw declines, while commerce, especially automobile sales, experienced slight growth.

Policymakers have already reduced interest rates and may continue as inflation moves closer to the target range.