Significant Setback for Kast Government: Chile’s Economic Activity Indicator Drops 1.5% to Its Lowest Point in Over Three Years

Original article: Duro golpe para el Gobierno de Kast: Imacec cae 1,5% y anota su peor registro en más de tres años

President José Antonio Kast’s economic management has faced a severe blow as Chile’s Central Bank announced today that the Monthly Economic Activity Indicator (Imacec) for July 2026 recorded a contraction of 1.5% compared to the same month last year, marking the worst performance in over three years.

According to preliminary data from the regulatory body, the seasonally adjusted series also fell by 1.7% from the previous month and by 2.1% over the past twelve months.

The Central Bank’s report indicates that the Imacec decline was attributed primarily to the mining sector, with additional contributions from services and industry. In the analysis of the seasonally adjusted series, mining and services were again the main determining factors.

The official document states that these results were partially influenced by weather conditions that affected the normal operations of productive establishments, a point that, while somewhat mitigating the impact, does not conceal the downturn across economic sectors during July.

In parallel, the non-mining Imacec showed a 0.3% annual decline, while seasonally adjusted figures dropped 0.5% from the previous month and 1.0% over the past year.

Breaking down the performance by sectors, goods production fell by 3.2% year-on-year, a result driven by mining performance, particularly copper, which was impacted by lower ore grades, maintenance, and adverse weather conditions. This also contributed to the downturn in industry, which saw reduced production in fuels and chemical products.

However, it wasn’t all bad in this sector, as other goods saw a growth of 3.4%, driven by an increase in the added value from power generation, influenced by improved water availability.

On a monthly basis, goods production recorded a decrease of 3.4% compared to the previous month, attributed primarily to mining.

Commercial activity experienced a 0.7% annual growth, fueled by retail, which was partially offset by lower wholesale sales. In retail, the highest sales were observed in grocery stores, specialized clothing outlets, and online platforms, while the drop in wholesale trade was mainly due to lower sales of construction materials.

According to the Central Bank report, automotive sales marginally increased due to a rise in maintenance services while car sales decreased. However, when looking at seasonally adjusted figures, this sector showed a 1.4% contraction from the previous month, driven by wholesale trade, and to a lesser extent, by automotive and retail sales.

Finally, the services sector did not escape the negative trend, with services declining by 0.7% annually. This downturn was attributed to personal, business, transportation services, as well as restaurants and hotels, with personal services particularly impacted by reduced educational services due to class suspensions caused by weather conditions. This highlights how external factors have directly affected daily activities and consumption.

The seasonally adjusted figures showed a 1.1% decline compared to the previous month, driven mainly by personal services.

The magnitude of these declines illustrates that the Kast government is facing a complex scenario for economic reactivation in the short term, with data indicating a widespread stagnation in the country’s most sensitive sectors.