June 30, 2020 / 1:25 PM / 14 days ago

Chile jobless rate hits 11.2% as coronavirus lockdown slams economy

SANTIAGO (Reuters) - Chile’s unemployment rate CLUNR=ECI hit 11.2% between March and May, the government said on Tuesday, laying bare the devastating impact of coronavirus lockdown measures on the South American nation’s economy.

The pandemic has exploded in Chile since May, with cases soaring to over 275,000 and the death toll at 5,575. All of Santiago, the country´s capital and economic engine, is now under lockdown.

People working in the commerce, accommodation, food services and construction sectors were the worst affected, national statistics agency INE said, while self-employed people were the worst hit across the board.

INE director Sandra Quijada said many Chilean workers have dropped out of the labor force all together amid the lockdown, which has affected more than half the country´s population. When they return, she said, they may struggle to find jobs in severely impacted industries like tourism and construction, further boosting the unemployment rate.

“It is very possible that if we maintain the current conditions we will have worse unemployment rate indicators next month,” Quijada said.

The coronavirus outbreak has deepened a growing economic crisis in Chile, once among Latin America´s most stable economies.

The country was hit by widespread protests over inequality late in 2019, leading to billions in losses and damages to businesses. Economists now widely predict double digit unemployment and a drop in gross domestic product of around 7.5% by year´s end.

Reporting by Aislinn Laing and Natalia Ramos, writing by Dave Sherwood; Editing by Steve Orlofsky

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