SANTIAGO – Chile’s monthly economic activity index, IMACEC, registered an expansion of 4.6% in March, representing the highest value since 2013. The finance minister expressed his satisfaction with this result: “Economical activities went far beyond expectations,” said minister of Finance Felipe Larraín.
The IMACEC in Chile had an increase of 4.6% in March 2018, which represents the highest level since 2013 according to the central bank. Moreover, the bank revealed that the seasonal adjustment increased 6.1% over 12 months, being miner IMACEC up to 31, 7 % while non-miner index was up to 2, 9 %. Finance minister Felipe Larraín said “there is a great impulse of mining activity, which has presented an expansion of more than 30%. However, mining activity only contributes 1.8 percentage points to IMACEC, and non-mining activity is providing 2.8% so there is also an improvement in non-mining activity.” He added, “We also have to consider that in this case, March had two business days less than the last year. That is also an effect that if we considered the seasonally adjusted series, the expansion would be even higher.”
Due persistent strong economic growth, among the highest in Latin-America, Chile has reduced poverty from 26% to 7.9 % according to the World Bank . In addition, the bank predicted growth would bounce back from 2018-2020, as it also expects a gradually declining fiscal deficit because fiscal policy is linked to structural balance.
A responsible fiscal and macroeconomic management provides a solid base to achieve more inclusive growth. To make that possible, Chile needs to find a consensus on the expectations of a growing middle class, as the potential of economic growth must be increased, too. In a short term it is critical to maintain trust in the private sector and also give the economy impulses beyond mining. In the long term, it is necessary to improve productivity and energy supply, as well as reducing the dependence on mining and facilitate access and quality of social services.
Editor-In-Chief Boris van der Spek is the founder of Chile Today.