(Adds central bank chief’s comments on labor market, economic growth)
SANTIAGO, June 7 (Reuters) - Chile’s unemployment rate could rise by about 1 percentage point to over 7 percent later this year, the head of the central bank said on Tuesday, underscoring that the labor market was a “concern for everyone today.”
The jobless rate in Chile for the February-April period rose to 6.4 percent from 6.3 percent in the January-March period.
“In our base case scenario we assume that there is a certain additional fragility in the labor market, that the unemployment rate keeps rising,” Central Bank of Chile President Rodrigo Vergara told reporters.
When asked how much the jobless rate could rise, Vergara responded: “It’s difficult (to say). But it could be around 1 percentage point from current levels.”
The central bank has warned that Chile’s labor market will deteriorate on the back of subdued economic growth and falling investment in the South American nation, which is the world’s top copper producer.
The bank on Monday lowered its economic growth forecast for 2016 due to weakness in the key mining sector and a drop in investments, cutting its 2016 gross domestic product growth projection to a range of 1.25 to 2.0 percent.
Economic growth was 2.0 percent in the first quarter.
“The coming quarters are going to see lower (growth) on average ... so it’s difficult to think that there could be an improvement in the labor market during the remainder of the year,” said Vergara.
A recovery in the labor market could begin during 2017, though it may take even longer, he added. (Reporting by Felipe Iturrieta; Writing by Anthony Esposito; Editing by Paul Simao and James Dalgleish)