Chile economy grows 1.1% month-on-month and 19.1% year-on-year through August

RIO DE JANEIRO, BRAZIL – The Chilean economy grew by 1.1 % in August compared to the preceding month, in full recovery from the Covid-19 pandemic that led to the lifting of confinements and the relaxation of health measures throughout the country, the Central Bank reported Friday, October 1.

The Monthly Economic Activity Indicator (IMACEC), an index comprising 91% of goods and services in the GDP, also points to a gross domestic product growth of 19.1% compared to August 2020, one of the highest inter-annual growths of the past 3 decades.

The 1.1% increase represents the 6th positive figure of the year since July, when the economy grew by 1.4% over the preceding month and by 18.1% year-on-year.

The August IMACEC exceeded market expectations for a year-on-year increase of 18%, partly due to the comparison base of August 2020, the last month in which the country recorded a double-digit contraction of 11.3%.

“All of IMPACEC’s components increased with respect to the same period last year, highlighting the contributions of services activities and trade,” the issuer reported.

Commercial activity rose by 25.5% year-on-year and by 1.5% over the preceding month, something that could be partially due to economic measures to support households and partial withdrawals of pension funds, experts say.

Production of goods grew by 10.9% compared to August 2020 due to the performance of the construction sector and the manufacturing industry, which grew by 14.8%. In contrast, mining fell 1.7%.

The services sector also posted an increase of 22.4% “mainly due to the performance of personal services, particularly education and health, and, to a lesser extent, business services, transportation, restaurants and hotels.”

After more than 1.65 million infections and almost 37,500 deaths, the pandemic has been under control for 2 months in Chile, which is partially recovering normality in parallel to a vaccination process that has covered over 88% of the target population with 2 doses.

In August, the Central Bank increased its GDP growth projection for 2021, estimating that it will range between 10.5% and 11.5%, while the Economic Commission for Latin America and the Caribbean (ECLAC) pointed to an increase of 9.2% for this year.