CHILEAN UNEMPLOYMENT DROPS TO LOWEST LEVEL SINCE

UNCLAS SANTIAGO 000452 SIPDIS SIPDIS E.O. 12958: N/A TAGS: ECON ELAB CI SUBJECT: CHILEAN UNEMPLOYMENT DROPS TO LOWEST LEVEL SINCE 1997 ¶1. In the final trimester (November 2005-February 2006) of President Lagos' administration, unemployment in Chile dropped to its lowest level since 1997. Nationwide unemplQment now stands at seven percent. Over the course of the last year, the Chilean economy created almost 100,000 new jobs, while 70,000 new job seekers entered the labor force. Unemployment figures normally dip during Chile's summer months as employment in sectors such as tourism, agriculture and construction expands. By comparison, during last year's corresponding trimester, unemployment dropped to 7.5 percent. ¶2. During Lagos' 2000 election campaign, as Chile suffered near double-digit unemployment as a fallout from the 1997 Asian financial crisis, Lagos promised to create 700,000 new jobs. According to recent public statements by Minister of Labor Ljubetic, the Chilean economy created 570,000 new jobs during the 2000-2005 timeframe. ¶3. The non-inflationary rate of unemployment in Chile is generally considered to be five percent. Six of Chile's thirteen regions are now close to that mark. Before the Asian financial crisis in 1997, overall unemployment in Chile had been around that five percent mark. Nationwide unemployment peaked at an average of 9.7 percent for 1999. In the fallout from the Asian crisis, Chile's export-driven market faced much lower real GDP growth and sustained higher unemployment. With real GDP growth in 2005 estimated at 6.3 percent and nationwide unemployment dipping to seven percent, Chile is nearing the sort of growth and job creation levels it enjoyed before 1997. KELLY