Chile jobless rate hits 9% during pandemic, highest in decade

(C) Reuters.

By Dave Sherwood

SANTIAGO (Reuters) – Chile’s unemployment rate hit 9% between February and April, the government said on Friday, holding its highest level in a decade as lockdown measures battered the South American nation’s ailing economy.=eci>

The trade, fishing and manufacturing industries saw the sharpest drops in employment, the national statistics institute INE said in a statement. The self-employed in all sectors were particularly hard hit, the agency said.

Chile’s unemployment rate had already hit a decade-long high in the first quarter, lifted by months of protests over inequality in late 2019 that paralyzed the country.

Increasingly strict lockdown measures through May in the capital Santiago, the country’s economic engine, are likely to leave many more out of work, the agency said, warning that Friday’s jobless figures still “do not reflect all of the effects of COVID.”

The agency also highlighted a sharp spike in workers who still have contracts with an employer but can collect unemployment insurance under an emergency law while their businesses are closed.

The fate of those workers, called the “absent employed,” will determine how much damage the coronavirus wreaks on Chile’s labor market, Credicorp (NYSE:BAP) Capital said in an analyst note.

“The key question is how many of these jobs effectively will be permanently lost as a result of the crisis,” the consultancy said.

Chile, once among Latin America’s most stable economies, has reported more than 90,000 coronavirus cases and 900 deaths.

The South American nation has already announced an historic stimulus package of $17 billion, worth more than 5% of gross domestic product, to ease the economic impact of the pandemic.

Measures include beefed-up unemployment checks, deferred tax payments and government-backed credit lines for small business.