Chile’s economic activity grows by record 20.1% in June

RIO DE JANEIRO, BRAZIL – Chile’s economic activity grew a record 20.1% in June, driven by the adaptation of productive sectors to the pandemic and on a low comparison rate than the harsh month of June 2020, informed the Central Bank.

The Monthly Index of Economic Activity (Imacec) for June – which anticipates the subsequent calculation of the GDP – was above market expectations, which forecast an expansion of between 16% and 19% in the midst of the gradual relaxation of sanitary restrictions.

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According to the Central Bank, the seasonally adjusted series increased 2.1% with respect to May, while the month had one working day less than June 2020, when the pandemic hit Chile hard and dragged the Imacec down by 12.4%.

For the government, this year’s good figure is not only due to the low comparison rate.

“It is true that last year this same month was awful for the economy. However, 20% goes beyond a rebound effect,” commented Finance Minister Rodrigo Cerda.

“We have to be proud as a country of what we are somehow achieving. The recovery of the economy is basically made by those who are here, the workers who allow the economy to get going again,” he added.

GENERALIZED GROWTH

According to the Central Bank’s report, during June, “all the components of the Imacec grew with respect to the same period of the previous year, highlighting the contribution of service activities.”

In fact, commercial activity grew 46.4%, boosted by the economic aid provided by the government to face the pandemic (benefiting 15 million of the country’s 19 million inhabitants) and the partial withdrawals from pension funds, approved by Congress to help families.

In May, the year-on-year growth of economic activity according to this index had been 18.1%, until then the highest since records have been kept at the Central Bank, now surpassed by June’s 20.1%.

The Central Bank estimates that Chile’s economy will grow up to 9.5% this year, more than recovering the 5.8% drop recorded last year. The forecast is based mainly on the boost from social benefits, pension fund withdrawals, and the international rise in the price of copper, of which Chile is the world’s leading producer.

With 80% of its target population (15.2 million out of a total population of 19 million) fully vaccinated, Chile is facing a reduction in coronavirus infections after a boom in cases since March forced the decree of quarantines in large part of the country.

Today, with infections reaching around a thousand per day, almost the entire country is free of the disease. However, some restrictive measures for commercial activities, such as reduced capacity and nighttime curfew, are still in place.