Chile’s IMACEC (monthly economic activity index) contracted 1.5% in July, sharply undershooting market expectations for 0.4% growth, data from the Central Bank of Chile showed. The measure tracks most sectors of the economy and serves as an early proxy for GDP. The result marked a sharp reversal from the previous month and raised concerns about the strength of Chile’s recovery. Possible contributing factors include weak domestic demand, lower copper prices, global economic uncertainty and the lingering effects of high interest rates. With inflation having moderated in recent months, the data could affect the Central Bank of Chile’s monetary-policy stance, while investors may reassess the peso, local bond yields and other Chilean assets. The report cautions that one month does not establish a trend, but policymakers and markets will watch whether the contraction proves temporary or develops into a longer slowdown.