Chile resumes growth and leaves recession behind

Economic expansion is especially due to increased activity in the mining, retail, electricity, water and gas sectors. According to experts the economic crisis is on the retreat.

Growth and recession

The Chilean economy grew at an interannual rate of 3.1% in November 2009, which was higher than the most positive estimates and is the first increase after a year of recession caused by the world economic crisis.

Last year the country experienced its first annual economic contraction after a decade of sustained growth, a situation that is already being left in the past thanks to the government’s fiscal stimulus plan and the measures taken by the Central Bank, which cut interest rates, among other things.

The increase in the Monthly Economic Activity Indicator (Imacec) in November was influenced by increased activity in the mining, retail, electricity, gas and water sectors, the financial institution reported.

Another aspect that allowed this recovery was that there was one more work day compared to the same month in 2008, when economic activity showed negative growth of -1.1% amid the effects of the international economic crisis.

Specialists applaud the results

While it is true that Chilean experts had anticipated a recovery in activity, the numbers were better than expected, as analysts had calculated an interannual growth of close to 2.5%.

“The November Imacec marks the end of the recession in terms of successive drops in productive activity. We should only see positive numbers from now on,” said Tomás Flores, an economist at the Instituto Libertad y Desarrollo. “A GDP of 1.4% is expected for the fourth quarter,” he added.

For his part, César Pérez Novoa, executive director of Celfin Capital, said that “if you look at what the market is expecting, it is that the economy will have a positive boost over the coming months so that we can experience growth of at least 4.5%.”

Meanwhile, Finance Minster Andrés Velasco highlighted the swift recovery: “the economy is growing, and at a very good pace (…) a consistent image is emerging, which is what we had been saying for a long time,” he said.

This post is also available in Spanish