May 13, 2014 / 5:30 PM / 4 years ago

Chilean businesses hurt by economic slowdown - central bank survey

SANTIAGO, May 13 (Reuters) - Chilean businesses are hurting from the country’s economic slowdown as it starts tapping the brakes on consumer demand, a central bank survey showed on Tuesday.

The economy of the top copper producer has been gradually losing steam over the last several quarters and grew 2.4 percent in January to March compared with 4.9 percent a year earlier.

That was the slowest rate of growth for any quarter since early 2010 and flagging retail sales have clearly started to affect many businesses.

“With some exceptions, those interviewed indicated that the their business performed worse in the first quarter compared to the end of 2013 and also that performance was below expectations,” the central bank survey of so-called “business perceptions” said.

The closely-watched biannual survey is based on interviews with the management of about 100 businesses across the South American country.

In general, the survey showed that businesses performed worst in Chile’s northern, mining-intensive region. Mining investment has slowed on the back of lower demand from top metals consumer China.

Survey participants expressed concern about the Chilean peso’s recent depreciation but said the impact on final prices “has been reduced by the reigning economic conditions” including lower demand.

The peso has depreciated around 4.5 percent versus the U.S. dollar so far this year, following a 9 percent drop in 2013.

The survey showed that business conditions are expected to remain mostly unchanged in the second quarter, but they are seen picking up in the second half of the year.

Reporting by Anthony Esposito; Editing by Tom Brown

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