Chile’s economic activity in April soared a record 14.1% over 2020

RIO DE JANEIRO, BRAZIL – (REUTERS) Chile’s economic activity soared a record 14.1% in April, over April 2020, the Central Bank said on Tuesday, June 1, with growth magnified by a weak comparative figure in the previous year and early signs of recovery from months of coronavirus-induced stagnation.

The bank’s monthly IMACEC economic activity index encompasses about 90% of the economy tallied in gross domestic product figures.

Economic activity dropped 1.4% versus March, however, as much of the country was locked down in April amid a fierce second wave of contagions that followed the southern hemisphere summer.

Commercial activity nonetheless soared 33.1% in April versus the previous year, while services jumped 16.3%. The production of goods rose 3.8%, mainly supported by manufacturing, the bank said. “This result was explained, in part, by a greater adaptation of homes and companies to the health emergency associated with Covid-19,” the bank added.

In April last year, economic activity had plunged 13.8% year-on-year as the Chilean government moved early to stave off the fast-spreading virus.

Finance Minister Rodrigo Cerda said demand had recovered well despite the lingering pandemic, but also highlighted other signs of a longer-term uptick in growth. “Imports of capital goods, a key indicator for investment, also continue to expand at very high rates, leading us to believe we have new momentum that will allow us to maintain high growth,” he added.

Scotiabank said in a note that the strong April numbers supported revising upwards the Central Bank’s official estimate for full-year 2021 growth, from a range of 6-7% to 7-8%. Scotiabank did, however, note that rising cases in recent days in Chile were reason for “caution” in the short-term.

Chile is among the world leaders in vaccination against Covid-19, but cases have soared among the country’s youth, who have yet to be vaccinated, once again raising the specter of renewed lockdowns.