November 14, 2019 / 6:22 PM / a month ago

Chile finance minister warns of job losses, rising fuel costs amid unrest: reports

SANTIAGO (Reuters) - Chile’s finance minister warned as many as 300,000 jobs could be lost as the impacts of weeks of rioting hammer one of Latin America’s strongest economies, according to a report in business journal Diario Financiero.

Newly appointed Finance Minister Ignacio Briones told a legislative committee it was “highly likely” unemployment would jump 3% in the coming months.

“It’s obvious to anyone that a country that is operating at half speed is also generating employment at half speed,” he said.

Ongoing rallies, looting and arson have killed more than 20 people, sent the peso spiraling downwards against the dollar and wrought billions of dollars in damages in recent weeks. Many businesses have been shuttered for nearly a month and vandals have hobbled public transportation in Santiago, a city of 6 million.

Center-right President Sebastian Pinera has presented a raft of social and economic reforms to quell the demands of protesters, including boosting the wages of the lowest earners.

But Briones said boosting the minimum wage would worsen the situation. “The worst thing you can do is to raise the minimum wage by 20%,” Briones said, according to the report.

The falling peso, which hit an historic low on Thursday, raised the specter of a hike in fuel costs, Briones said. Chile imports almost all of the fossil fuels it consumes.

“Fuel prices are going to rise, it can’t be any other way,” Briones told reporters on Thursday.

Briones also warned of a “technical recession” in 2020, according to the newspaper.

“We cannot discard that scenario,” he said. “The situation is dramatic.”

Reporting by Dave Sherwood, Editing by Rosalba O'Brien

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