Chile’s economic activity contracted slightly in January, with the Imacec index – a key indicator of economic activity – falling 0.1%, according to an analysis by JPMorgan. The decline was largely attributed to a slowdown in the production of goods, impacted by widespread wildfires.
Despite the weak start to the year, JPMorgan analysts believe the negative effects of the fires will be temporary and dissipate in the coming months. However, the firm has lowered its GDP growth projection for the first quarter from 3.5% to 3.0%.
JPMorgan Analysis of the Imacec
The Central Bank reported that the seasonally adjusted Imacec rose 0.2% compared to the previous month and 0.5% year-over-year in January, though the month had one less working day than in 2025. The decline in goods production was partially offset by a strong performance in the services sector, which boosted the seasonally adjusted Imacec. The non-mining Imacec remained stable year-on-year, growing 0.1% month-on-month and 0.7% year-on-year.
JPMorgan’s analysis highlighted that agricultural and forestry operations were the most affected, coinciding with the emergency caused by the fires in the Biobío region, as well as in Ñuble and La Araucanía.
“The flames consumed forests and commercial plantations integral to the forestry industry’s value chain, while disrupting agricultural operations in nearby areas,” the report stated. “By the end of January, more than 45,000 hectares had been affected, displacing around 50,000 residents and resulting in numerous fatalities. Manufacturing activity also suffered collateral damage.”
The North American bank estimates that the effects of the wildfires on economic activity are transient and will subside in the coming months, while adjusting its GDP projection to 3.0% for the first three months of the year. This adjustment reflects the immediate economic impact of the disaster, but maintains a generally optimistic outlook.
JPMorgan’s analysis team maintains a positive outlook for the year, supported by results from consumer sentiment and business confidence surveys. The bank’s annual GDP growth forecast remains at 2.7% year-on-year.
