Chilean economy falls in June but slows its decline, according to IPP UNAB

The Economic Index IPP UNAB fell to 19.7 points in June, although with less intensity than in May. The report detects signs of stabilization but warns of weakness in employment and business confidence.

The Economic Index IPP UNAB, developed by the Public Policy Institute of the Andrés Bello University, decreased in June to 19.7 points, down from 24.2 the previous month. Despite the drop, the indicator remains in the category of “good, but worsening,” suggesting that the economic decline is losing intensity.

Among the positive factors, the report highlights the rise of the IPSA, the growth of exports driven by high copper prices, and the increase in foreign direct investment. These elements have contributed to the economy not slowing down as forcefully as in previous months.

Consumers and the labour market: lights and shadows

The study also reveals that inflation has dropped to 3.9% annually, and the proportion of delinquent debtors has decreased. However, the cost of consumer credit has increased, and informal employment remains high. Job creation and the employment rate show some stabilization, but without significant recovery.

For the researcher at the UNAB Institute of Public Policies, Francisca Adasme, the most relevant aspect is that the economic decline is beginning to lose strength. However, she warned that the consolidation of this improvement will depend on whether positive signals reach the labour market and households during the second half of the year.

What to expect in the coming months?

The IPP UNAB is at a level that reflects weakness in activity, employment, and business confidence. Although the IMACEC has deteriorated and the peso has depreciated against the dollar, analysts are confident that the price of copper and foreign investment will continue to support the economy. The key will be whether the improvement in financial indicators translates into consumers' pockets and the labour market in the short term.

“The consolidation of the improvement will depend on whether positive signals reach the labour market and households during the second half of the year,” said Francisca Adasme.

For investors and entrepreneurs, the report suggests that the scenario remains uncertain, but with fewer risks of a sharp decline. The recommendation is to closely monitor the evolution of employment and credit, as well as monetary policy decisions that may affect the cost of financing.