(Adds detail on output, context)
SANTIAGO, March 31 (Reuters) - Chilean manufacturing production fell more than expected in February, government data showed on Monday, underlining the challenge facing President Michelle Bachelet the same day she begins a pledged tax-and-spend program of reforms.
Factory output fell 2.0 percent in February from a year earlier due to lower metals and chemical production, a much bigger drop than the 0.4 percent decline forecast by economists in a Reuters poll.
On a seasonally-adjusted basis, it slipped 4.2 percent in February from January.
Retail sales, a measure of private consumption, grew 5.3 percent in February versus a year earlier, “continuing the deceleration observed in recent months,” the government’s INE statistics agency said.
The data underscores a slowdown in the world’s top copper producer just as Bachelet is due to submit a wide-ranging tax reform bill. Critics of the bill charge that it may worsen an already cooling investment climate.
“There is a situation of decreasing consumption expectations and a smaller workforce, with signs of adjustments in the market, such as the central bank lowering the monetary policy rate and lower imports of durable goods in the last three months, which reflects lower expectations for the consumption of these goods,” the INE said.
The agency also reported that the Andean nation’s jobless rate for the December-February period remained steady at 6.1 percent. (Reporting by Santiago bureau; Editing by Chizu Nomiyama and Bernadette Baum)