Chile’s economy sees strongest growth in 15 years this February

The Chilean economy expanded 7.2 percent on the year this month, with monthly activity beating expectations as the country rebounds from the late February 2010 earthquake and a 2009 recession.

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Chile’s monthly economic activity index, or Imacec, grew 7.2% this February over the same month last year, the central bank has declared.

The growth surpassed the 5.9 percent increase that market experts from Dow Jones Newswires had been hoping for.

The seasonally adjusted Imacec was up four points from the previous analysis this January. In a brief statement, the central bank said February growth was mostly the result of growth in the retail, agriculture, forestry, fishing and transportation sectors. February, it also noted, had the same number of business days as the the same month last year.

Encompassing 90 percent of Chile’s gross domestic product (GDP) components, the Imacec is considered the country’s prime indicator for changes in GDP and, by extension, economic activity.

Economic activity for this February beat expectations on the back of robust domestic demand, despite lower-than-expected industrial output and a contraction in mining production.

“This is the strongest growth the Chilean economy has posted for the month of February in 15 years,” said Finance Minister Felipe Larraín.

Looking forward, economic activity in March is expected to see double-digit growth due to the low comparison base, the result of last year’s quake and ensuing tsunami that caused damages estimated at US$30 billion and halted much industry for the month of March 2010.

“We’ll see growth of over 10 percent in March because we’re going to compare [monthly activity] to a month which was hurt by the earthquake,” said Larraín.

Investment bank Banchile Inversiones predicts the Imacec index surging over 14.5 percent in March, bringing growth in the first quarter to around 9.6 percent.

The central bank forecasts Chile’s GDP will grow 5.5 percent to 6.5 percent in 2011.