April 30, 2020 / 1:42 PM / a month ago

UPDATE 2-Chile jobless rate at decade high as virus fight takes toll

(Adds context, comment from brokerage BanChile)

SANTIAGO, April 30 (Reuters) - Chile’s unemployment rate rose to 8.2% in the first quarter from the same period a year ago, the government said on Thursday, hitting a decade high as measures to combat the coronavirus left many out of work.

Much of Chile´s economy has been shuttered since early March, when the outbreak began. Industries with the sharpest spike in unemployment were fishing and agriculture, manufacturing, and teaching, the national statistics institute INE said in a statement.

Unemployment had already begun to creep upwards in Chile following months of often violent protests over inequality that began in late 2019.

Now the coronavirus, and restrictions imposed to contain it, are expected to batter the already ailing economy.

Economists widely predict a sharp contraction of Chile´s gross domestic product in 2020 and double-digit unemployment by year´s end. Analysts believe a larger spike in joblessness will hit in April.

Brokerage BanChile said in a note unemployment could hit a maximum of 15% in 2020, before settling at 10.2% by year´s end.

“However, these projections are based on the assumption ... that there is no re-emergence of violence,” BanChile said. “Otherwise, the deterioration in the labor market could be even deeper.”

Chile, among Latin America´s most stable economies, has reported more than 15,000 coronavirus cases and more than 200 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. (Reporting by Dave Sherwood; Editing by David Gregorio and Tom Brown)

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