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Chile protests' economic impact will endure into 2021

Monday, December 9, 2019

Significance

The Central Bank’s report reveals the extent to which rioting and violence since mid-October have disrupted the economy. It forecasts that due principally to the impact of uncertainty on investment, the effects will persist next year and into 2021.

Impacts

  • A proposal to draft a new constitution, for which there is public demand, will perpetuate investor uncertainty.
  • In a positive effect, depreciation of the peso will boost the competitiveness of exports.
  • Increased government spending and social demands will pose questions about medium-term fiscal sustainability.
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