Chile’s economic activity fell by 15.3% in May from the same month in 2019, according to the Central Bank, hitting yet another historic low as measures to contain the spread of the coronavirus left many out of work and businesses shuttered. The bank’s IMACEC economic activity index encompasses about 90% of the economy tallied in gross domestic product figures.
With the Imacec in May dropping by 15.3%, the market predicts what the June Imacec could be. According to Banco Santander, the June Imacec should have fallen less intensely than in the previous months, but the annual variation would be a little lower than in May, around -16%. Meanwhile, Mauricio Carrasco from Econsult, projects a further deterioration in activity in June, with a decrease between 15-20%.
The government of Chile has cut the salaries of 693 of its members. The cuts ranged from 1% to 25%. President Piñera's salary was cut by 10%, while 55 Members of The House, 43 Senators and 24 Ministers had their salaries cut by 25%. The President has set up a special Advisory Board (Consejo de Alta Dirección Pública) to take on the job of coming up with the percentage cuts to make sure that it would not be considered a conflict-of-interest. If the president signs the off on this new measure, it would allow for additional cuts for around 10,000 public servants’ salaries.
Global miner BHP has announced that it would begin to scale down activity at its small Cerro Colorado copper mine in Chile amidst the pandemic. BHP said the new plan would mean a gradual reduction in staff that would begin this year and span the coming four months. The company said it would continue to “look for medium and long-term alternatives that would allow it to extend its mining operation beyond 2023.”
California-based energy infrastructure company, Sempra Energy, has completed its exit from South America with the sale of assets in Chile and Peru. The company raised roughly $5.82 billion in combined cash proceeds from its divestment in the two countries. The Chilean sale was completed last week and generated around $2.23 billion.