Chilean economy falls 0.4% in December and grows 10.1% year-on-year

The Chilean economy registered a drop of 0.4% month-on-month in December and a growth of 10.1% compared to the same month of the previous year at a time when the pandemic had stabilized for several months, the Central Bank reported on Tuesday.

The Monthly Indicator of Economic Activity (Imacec), an index that brings together 91% of the goods and services of the gross domestic product (GDP), was lower than what the markets expected, which estimated a year-on-year rise of between 12% and 12.5%. .

The month-on-month fall, which according to the issuing entity is explained “for mining performance”, is the first negative figure since the April mark, when the country was plunged into a serious second wave, which forced the confinement of 90% of the population.

In parallel, December was the tenth month of year-on-year increase, largely due to the low base of comparison of 2020, when the economy fell by 0.3%, and extensive restrictions on mobility were in force.

“All Imacec components grew compared to the same period of the previous year, highlighting the contribution of service activities and, to a lesser extent, trade”, pointed out the Central Bank.

This result was explained, in part, bythe greater opening of the economy, the support measures for households and the partial withdrawals of pension funds”.

The production of goods increased by 3.3%, although it fell by 1.8% compared to the previous month, a result determined mainly by the drop in mining, an industry that represents close to 10% of GDP and was key to the recovery during the beginning of the health crisis.

Commercial activity increased by 14.8% thanks to wholesale sales of raw materials and retail sales of clothing, footwear and household equipment, although in seasonally adjusted terms, it fell by 1.4% compared to the previous month.

The services area grew by 12.6% year-on-year and 1.4% compared to the previous month, mainly “by business services, followed by personal services, in particular health”.

The pandemic, which already leaves more than 2.1 million infected and 39,700 deaths, has registered a massive spike in infections in recent weeks due to the rapid expansion of the omicron variant, although the country has not put new mobility restrictions.

In parallel, one of the most successful vaccination processes in the world has been implemented, reaching 92.7% of the target population with two doses and more than 12.4 million of the almost 19 million inhabitants with a booster dose.

In December, the Central Bank increased its projection for growth of the gross domestic product (GDP) in 2021, estimating that it will range between 11.5% and 12%, while the Economic Commission for Latin America and the Caribbean (ECLAC) pointed to a rise in 9.2% for this year.