The Chilean economy expanded lower than the reduced trend rate of below three percent, as compared with over four percent a few years back. In this regard, the labor market’s resilience does not show the state of the economy. Resource utilization is possibly being maintained at a high level by counter-cycling fiscal spending of the government. Meanwhile, any significant rebound in growth from present levels seems unlikely at present due to the challenging external environment.
“We expect the unemployment rate to have increased to 6.5 percent in April from 6.3 percent in March, based on recent trends in the labour market and assuming 1.6 percent yoy growth in the labour force and 1.3 percent yoy growth in employment”, said Societe Generale in a research report.
However, the Chilean labor market is likely to weaken from the current levels in the medium term, added Societe Generale.
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