Chile’s Technical Recession Depends on Which Measure You Use
CHILE · ECONOMY
Key Facts
- —The claim That Chile has confirmed a technical recession.
- —Who did not say it The Banco Central de Chile. It has never used the term.
- —The figures Output fell 0.2% in the second quarter and 0.3% in the first, against a year earlier.
- —Why it is disputed Quarter-on-quarter and seasonally adjusted, the second quarter was flat rather than negative.
- —The finance minister Jorge Quiroz says there is no technical recession.
- —The number that is not disputed Activity fell 1.5% in July against a year earlier.
Whether Chile is in a technical recession depends entirely on which of two standard measures you use. Both are legitimate, and they give different answers.
Chilean coverage has settled on the phrase technical recession. The central bank has not used it, and the finance minister rejects it outright.
What the Central Bank Published
National accounts for the second quarter came out on 18 August 2026. Output fell 0.2% against the same quarter of 2025.
The first quarter was revised at the same time, from a fall of 0.5% to a fall of 0.3%.
Those are the year-on-year readings, and they are the ones Chilean commentary generally uses.
The Measure That Gives the Other Answer
Seasonally adjusted and measured against the previous quarter, the picture changes. The first quarter fell 0.3%.
The second quarter did not fall. The central bank wrote that activity showed no variation against the previous quarter. At full precision it was minus 0.02%.
Internationally, a technical recession means two consecutive quarter-on-quarter contractions. On that definition, Chile did not have one.
On the year-on-year definition widely used in Chile, it did. Neither reading is wrong. They answer different questions.
Who Says What
The central bank did not use the term in its release. Finance Minister Jorge Quiroz said plainly that there is no technical recession.
Economy and Mining Minister Daniel Mas described the period as demanding.
Rodrigo Vergara, a former central bank president, takes the other side. Chile had a technical recession in the first half, he said.
Scotiabank’s Jorge Selaive and Universidad Diego Portales economist Valentina Apablaza take the same view. This is a genuine professional disagreement, not spin.
The July Number Nobody Disputes
The monthly activity index for July was published on 1 September. It fell 1.5% against July 2025, and 1.7% against June on a seasonally adjusted basis.
Stripping out mining, the fall was 0.3% year on year. Mining did most of the damage, through lower ore grades and weather.
Diario Financiero described it as the sharpest fall in more than three years. That is the accurate framing, not the sharpest ever.
It points to a possible negative third quarter. It does not settle the argument about the first half.
Why the Label Matters
Recession is a word with weight. It moves currency positions, it shapes political argument and it changes how a country is described to foreign investors.
When a label is contested, the honest approach is to give the underlying numbers and name the disagreement. The numbers themselves are not in dispute.
A reader who knows that output was flat quarter on quarter and down 0.2% year on year has everything they need.
How This Reads Alongside the Politics
The economic figures landed in the same month as the Cadem poll. It gave President José Antonio Kast a six-month grade of 3.4 out of 7.
The two are related but not identical. Approval had already fallen before the July activity figure.
The central bank halved its 2026 growth forecast earlier in the year. That revision, rather than the recession label, is the substantive change.
What Is Not Known
Third-quarter national accounts are not yet available. Until they are, whether the weakness extends beyond the first half is unresolved.
Nor has the central bank indicated it will adopt the recession language. It has given no signal either way.
For an investor, the practical position is that Chilean output has been broadly flat to slightly negative for three quarters. The label attached to that is a separate argument.
More: Chile news and analysis, every day from The Rio Times.
Frequently Asked Questions
Is Chile in a technical recession?
It depends on the measure. Year on year, two quarters fell. Quarter on quarter and seasonally adjusted, the second quarter was flat.
Did the central bank say so?
No. The Banco Central de Chile has not used the term in any release.
What were the GDP figures?
Minus 0.2% in the second quarter and minus 0.3% in the first, against the same quarters of 2025.
What did the finance minister say?
Jorge Quiroz said there is no technical recession.
What was the July activity index?
Down 1.5% against July 2025, the sharpest fall in a little over three years.
What comes next?
Third-quarter national accounts. The July reading points to a possible negative quarter.
Sources: Banco Central de Chile, Emol, Cooperativa, Diario Financiero, The Clinic.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
In depth
Read More from The Rio Times