Chile’s Economic Growth Stronger Than Expected in December
SANTIAGO – The Central Bank of Chile released economic growth figures for the month of December 2011, which showed stronger results than expected. Compared to December 2010, there was a 5.3% increase in growth. The growth index is known as IMACEC and was released today, February 6th.
The increase was boosted by the retail and mining sectors. Bank President Rodrigo Vergara noted the difference between sectors at the impact of instability in world economic markets upon those heavily reliant on exports. “Clearly there are differences between sectors. In some industrial areas, especially those dedicated to exports, it’s noticeable there’s less vigor” he said during a Senate session on the effects of the global economic slowdown.
December figures show growth increased in Chile. Photo: Renjith Krishnan via Free Digital Photos
Retail growth is expected to remain strong in Chile, while a slowdown on copper is expected, with many buyers hesitant in uncertain financial times. The copper price decreased slightly last week, though has been increasing since December.
Codelco, the biggest producer of copper in the world announced they are unlikely to be able to match the production levels of last year, but will be heavily investing in their mines to increase production for future years.
Growth is expected to remain at approximately 4% throughout the year. Mining, industrial production, communications and retail are expected to be the strongest contributors. Retail has been growing strongly over the holiday period, though is expected to fall to approximately 6%.
Chile recently dropped official interest rates from 5.25% to 5%, the first change to the rate in six months. As of January the annual inflation rate was 4.31%, which is well above the Central Bank’s target rate of 3%. Some analysts expect the target rate will not be reached over the course of this year.
The peso fell this morning and is now trading against the US dollar at 480.50. The peso has fallen from over 510 in the past month.
Daniel Boyle is an Australian living in Santiago. He is the News Content Manager at I Love Chile. Daniel's main interests are sports, music and travel. He has a degree in Sports Management and is completing a Master of Arts (Writing). Daniel plays the sport of Freestyle Footbag and is hoping to spread it through Chile.
