Finance Ministry assures strong recovery for Chile

Despite the fact that the February Imacec of 2.7% was lower than had been expected, the economic outlook is positive thanks to the new reconstruction and employment programs.

Recovery for Chile

Chilean Finance Minister Felipe Larrain highlighted that the Monthly Economic Activity Indicator (Imacec) of 2.7% for February represents the fourth consecutive month of economic growth in the country.

The minister affirmed that responsible fiscal management and the reconstruction and employment programs created to overcome the impact of the earthquake last 27 February will help to improve the country’s financial situation.

“Despite the difficulties that the economy faces in the short term, we are optimistic regarding the second half of the year: We are going to have a strong semester in terms of economic activity and we are precisely working on the financing packages to make sure that happens,” the minister said.

However, specialists had projected a February Imacec of between 3.5% and 5.3%, which prompted the minster to explain that the increase of just 2.7% was one of the earthquake’s consequences.

“You have to see the glass as half full, not half empty. The Imacec has shown its fourth consecutive month of productive growth in 12 months. It is true that is was somewhat below what analysts had anticipated, but it was influenced slightly by the effect of the earthquake on a work day, 27 February,” he stated.

In addition, Larraín added that the numbers produced over the coming months will be complicated, but that the economic recovery will make itself felt in the second half of year. He also said that increased consumption will fuel positive growth indicators.

He stressed the coordination between the government and the Central Bank, which have clear fiscal policies that will allow inflationary pressures to be avoided. Along these lines, the government’s goal is to achieve average growth of around 6% over the course of current President Sebastián Piñera’s four-year term.

With regard to the plan to rebuild the country, Felipe Larraín affirmed that it will be revealed soon and that “we are studying a financing package that balances different elements. These include analyzing the issue of taxes.”

Likewise, he sent a message to calm the population after the earthquake and added that “any change made to taxes will be moderate and we are going to make sure that it does not affect economic growth.”