According to data released by state copper agency Cochilco, Chile has managed to boost its production in the face of the outbreak, churning out 492,500 tonnes from its sprawling mines in May, a 1% increase over the same month the previous year. The country’s output since January has risen 3.9%, to 2.4 million tonnes.
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 Manufacturing Production Index decreased by 13.3% in May, hit by a decline in food processing, according to the National Statistics Institute (INE). The INE also reported that copper production in Chile rose by a weak 0.6% year-on-year to 495,604 tons in May, with resource extraction up 3.4% to May. Furthermore, the INE also said that the Mining Production Index showed an increase of 2.1% over the same month last year.
Unemployment in Chile rose to 11.2% in May and remained at its highest level in a decade especially in key sectors such as trade, accommodation and food services, according to the National Statistics Institute (INE). The record for May is 4 percentage points higher than in the same period of the previous year and 2.2 points more than in April.
After learning about the INE’s sector figures, Credicorp Capital projects that the Imacec in May could decrease by about 19% p.a. while a greater fall is projected in June as social distancing measures have affected a greater number of workers and economic activities, particularly the mining sector.
The Official Gazette published a series of modifications made by the Ministry of Finance to the regulations of the Guarantee Fund for Small Business Owners (Fogape), with the aim of improving the delivery of credits in the midst of COVID-19. The main changes introduced are the reduction of the deductible and the extension of guarantees for small businesses.
Copper prices rose on Monday, trading close to a five-month high, due to disruptions in the supply of the metal in Chile solid demand in China and reduced inventories of the input. Three-month copper on the London Metal Exchange (LME) gained 0.2% at $5,969.50 a tonne, close to $6,006. The metal, used in the energy and construction industries, has soared 35% from its March floors, recovering almost all of the ground lost during the early stages of COVID-19.
According to a report by the Association of Banks and Financial Institutions (ABIF), the number of clients connecting to online banking sites or apps reached more than 11 million in March, while the number of visits totaled 277 million sessions in the same month. Regarding the number of transactions carried out, the report indicates that, as of May, 55% of sales by credit card are associated with operations carried out over the internet; while ATM withdrawals decreased 54%, after less than 18 million were finalized last month.
The Inter-American Development Bank (IDB) approved a US $300 million loan to Chile to: enable the country to improve the incomes of the most vulnerable people, improve the adequacy of solidarity pension systems, improve the availability of medicines at a lower cost, improve the efficiency of public spending and the quality of the budget formulation process.