The Chilean economy will begin an upturn in another two months, after productive infrastructure and housing was lost in the mega-earthquake that hit the central-southern part of the country on Saturday 27 February and unleashed a devastating tsunami that swept away towns on the Chilean coast.
Economy Minister Juan Andrés Fontaine said as much when he affirmed that while it is true that the upcoming indicators of economic activity will reflect the consequences of the earthquake measuring 8.8 on the Richter scale, the government “expects to see the economy in full recovery in no more than 60 days.”
The minister added that “the first economic activity numbers that we see will be contaminated by the impact from the earthquake. Initially it will have a negative effect on employment because projects tend to be paralyzed, but we will see the positive effects of the efforts at reconstruction shortly thereafter because of reconstruction efforts.”
In addition, the cabinet member said that the goal continues to be creating 200,000 new jobs every year and attaining average growth of 6% during the Sebastián Piñera administration. The official forecast is that GDP will grow between 4.5% and 5% for 2010.
“Once the productive emergency has passed, reconstruction work tends to be labor intensive and will create more jobs. We are going to see a more powerful upturn than we had expected around mid-year,” Fontaine stated.
For his part, Economy Undersecretary Tomás Flores said that the bulk of the impact will be felt in March and April, but that by May the productive apparatus ought to be normalized, something that should be reflected in the Monthly Economic Activity Indicator (Imacec) for that month. “Of course, it is still too soon to know where the numbers will be at,” he stated.
For now the economic authorities’ main concern is to precisely determine the amounts that will have to be allocated to the reconstruction of cities like Talca and Concepción, which suffered serious damage from the earthquake, in addition to estimating the funds that will be needed to resolve the housing problems affecting thousands of Chileans after the catastrophe.
“We do not have a full assessment of the damages. We received information from the outgoing government over the last few days and it helps us to get an idea of the effect, but we are far from having the full picture, because the information changes as time goes by,” Fontaine concluded.