SANTIAGO (Reuters) - Chile’s economy is expected to start expanding again in 2020 in the wake of intense social unrest in the final months of last year, edging up by 0.50% in the first quarter, according to a poll of analysts released on Friday.
Analysts expect growth to hit 1.20% by December and 2.50% by December 2021, according to the poll by the Chilean central bank — in line with the bank’s latest projections of a range of 0.5% to 1.5% in 2020 and between 2.5% to 3.5% in 2021.
The analysts saw mildly better days ahead for economic activity too, which they said would be down 1% in December 2019 compared to the 3.3% reported for November, when the protests were at their height.
They projected a firming in the Chilean peso, which plunged to successive historical lows during the unrest, with a recovery to 760 per dollar in the next two months and reaching 725 within the next two years.
The 57 people polled saw the interest rate remaining unchanged for the foreseeable future at 1.75%, only reaching 2% in 23 months.
The bank said last month that recently announced fiscal stimulus measures and a depreciating peso would help push long-lagging inflation in the South American nation to its target. Inflation hit the bank’s 3% target this week.
Protests started in Chile in October over a hike in public transport fares and raged for successive months, leaving at least 27 people dead, thousands injured and arrested and President Sebastian Pinera with a 10% approval rating for his handling of the crisis.
The Chilean economy has been hit hard by the unrest, which wrought billions of dollars in damages to public infrastructure and private business and saw economic activity paralyzed.
Reporting by Aislinn Laing; Editing by Catherine Evans