Chile's economy to shrink by 4.9% as coronavirus ravages output: poll

FILE PHOTO: A worker wearing a preventive mask packs grapes at a facility of fruit exporter, during a grapes harvest at a vineyard, following the outbreak of coronavirus disease (COVID-19) in San Felipe, Chile March 27, 2020. REUTERS/Ivan Alvarado

SANTIAGO (Reuters) - Chile´s output is expected to shrivel by 4.9% in the second quarter as the global coronavirus outbreak continues to pummel one of South America´s most export-driven economies, a central bank poll of analysts showed on Monday.

Chile closed its borders early in March, and large swaths of the capital Santiago, a city of 6 million, have been locked down to halt the spread of the virus. Malls, schools, movie theaters and most non-essential services have been shuttered.

The poll of 52 analysts saw the central bank holding the benchmark interest rate at 0.5% for at least the next year in an effort to bolster the battered economy. The government has also announced a stimulus package worth 5% of the country’s gross domestic product.

Analysts predict consumer prices to creep up by only 0.2% in April, muted by plunging fuel prices and weak demand. Annual inflation was seen at 2.90%, on the low end of the central bank’s target range of 2% to 4%.

The exchange rate was seen at 840 pesos per dollar in two months.

Chile’s economy is largely driven by exports, ranging from copper to salmon, wine, fruits and vegetables.

Government statistics show one-third of Chile’s exports ship to China, whose economy is now restarting after months of battling coronavirus.

Reporting by Dave Sherwood; Editing by Kirsten Donovan and Jonathan Oatis