(Bloomberg) -- Chile’s economic activity shrank broadly in line with forecasts in March from the month before, giving the central bank more leeway to consider monetary policy easing at this month’s interest rate meeting.

The Imacec index, a proxy for gross domestic product, fell 0.7% in March from February, slightly more than the -0.6% median estimate in a Bloomberg survey. It gained 0.8% from the year before, the central bank reported Thursday.

Speaking on Monday, central bank President Rosanna Costa said policymakers should be cautious in assessing the macroeconomic scenario and the appropriate speed of monetary policy normalization.

Mining activity fell 1.3% on the month in March, according to the central bank. Production of goods slid 1.4% over the same period, while services dropped 0.4% and commerce contracted 0.1%.

Separate data published Tuesday showed retail sales and industrial production posting slower year-on-year growth in March than economists had expected, while commercial activity and manufacturing production fell. Unemployment ticked up to 8.7%, meeting expectations.

While March numbers reverse some of February’s strong performance, the economy is expected to maintain steady growth, César Guzmán, macroeconomics manager at Inversiones Security wrote in a report. 

“The economy should continue with a gradual recovery in the face of the greater external impulse due to the improvement in the terms of trade and local financial conditions,” Guzmán said.

--With assistance from Rafael Gayol.

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