Chile’s economic activity fell more than expected in May compared to the previous year as the central bank prepared to cut interest rates, Santiago is one of the few Latin American economies expected to contract this year.
Chile’s central bank said its economic activity index fell for the fourth consecutive month in May, underlining the economic headwinds the world’s largest copper producer is facing.
The Imacec index, a proxy for GDP, fell by 2% from a year earlier, more than the 1.7% decline that analysts had expected.
Chile’s central bank is expected to start cutting interest rates this month after holding them steady at 11.25% for eight months as inflation trends ease and economic growth stagnates.
There is evidence that tight monetary policy comes at a high economic cost.
