Chile central bank says economy recovering but some sectors lag
2024.05.07 10:55
By Natalia A. Ramos Miranda
SANTIAGO (Reuters) – Chile’s central bank said in a report on Tuesday that the economy is broadly recovering, though some sectors have lagged and financial market depth has not yet returned to levels seen before the coronavirus pandemic.
The bank pointed to the South American country’s commercial, construction and real estate sectors as having fallen behind, which it said had elevated the possibility of defaults.
“The external scenario continues to be the main source of risks for local financial stability,” according to the bank. Meanwhile, the finances of local companies and individuals had broadly improved, it said in a half-year stability report.
The monetary authority added that in the consumer sector, while more people were failing to meet mortgage payments, this remained at a relatively low level.
Household finances were overall seen stabilizing thanks to rising incomes and smaller financial burdens, according to the report.
The document stipulated that external macroeconomic risks highlight the importance of strengthening the resilience of local agents and the domestic financial market.
It also flagged risks including from uncertainty regarding U.S. monetary policy and rising global debt.
Chile’s inflation rate, which hit 30-year-highs in 2022, has been converging to the bank’s 3% target, pushing the bank to lower its benchmark interest rate from a high of 11.25% to its current level of 6.5%.
The report comes a day after the central bank board unanimously voted to keep capital requirements for risk assets at their same level since last May, a measure intended to boost the economy’s resilience in the face of severe stress scenarios.
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