‘Very significant drop’ in Chilean economy expected amid rise in unemployment


Photo by Mildred Caranto/The Santiago Times Staff
Ross Brown/The Santiago Times Staff

SANTIAGO – The minister for Economy, Development, and Tourism, Lucas Palacios says he expects a “very significant drop” in Chile’s economy in May as the coronavirus has started to bite the financial system in one of South America’s richest nation.

“The Covid-19 crisis is leading us to a sick tb [sic] economy, with job losses, liquidation of companies and decreased family income. We are in the middle of the darkest, longest and coldest night … Only with self-care, work, generosity and unity, we will get ahead,” the minister said on Monday.

Also today, in a series of tweets, finance minister Ignacio Briones said the IMACEC (Monthly Index of Economic Activity) for the month of April has shown a contraction of 14.1% compared to the same month of the previous year. “This is the unprecedented drop, the highest since records are available,” he added.

“The measures of confinement and distancing, keys to contain the advance of the virus, are manifested in our economy and make it produce half-machine. In April, 12% of the population was subject to mandatory quarantines, a figure that increased to 29% in May,” Briones explained.

“Along these same lines, different figures show how people have sharply decreased their mobility, the time they spend in their workplaces or the time spent on consumer activities. All this is expressed in economic activity,” he added.

The unemployment rate in Chile stood at 9% during the February-April quarter of this year and increased 1.9% in relation to the same period in 2019, the National Statistics Institute (INE) reported last week.

The INE highlighted that in the case of the Metropolitan Region, the area that concentrates the largest focus of those infected with coronavirus in Chile, “the unemployment rate for the quarter February-April 2020 was 9.4%” and explained that this rate rose 2 % over the same period of 2019.

The Communist Party (PC), an organization that fell short of the national agreement called this week by the government to attack the crisis caused by the coronavirus, delivered a letter to President Sebastián Piñera, with proposals that they consider “legitimate and capable of being carried out.” .

The letter contains “proposals to maintain the income of the families”, also measures for “the protection of the economic fabric” and to “reduce the inequality gap”.

The PC proposes creating an “emergency basic income” that reaches 80% of the population, and they also propose a “rescue or capitalization of companies essential for life and production, through their partial or total acquisition, through the creation of a fund of about 20,000 million dollars ”.

COVID-19 cases in Chile soar above 105,000, with 1,113 deaths

Since March 18, Chile has been living in a State of Constitutional Exception for Catastrophe for 90 days, decreed by the government, to deal with the crisis caused by the coronavirus.

The Health ministry on Monday confirmed a total of 105,159 cases of coronavirus in the country, with 1,113 deaths from the disease.