SANTIAGO – Chile’s economic activity increased 20.1% in June, the central bank said on Monday, driven by a low base for the previous year’s comparison and helped by one of the fastest vaccination campaigns in the world.
The bank’s IMACEC monthly economic activity index covers about 90% of the economy accounted for in gross domestic product figures.
A fierce second wave of COVID-19 hit Chile shortly after the southern hemisphere summer vacation in March, prompting health authorities to block off much of the country. But a fast-paced vaccination campaign has more recently begun to control the infection rate, allowing the economy to pick up speed again.
“All components of Imacec grew compared to the same period last year,” the central bank said in a statement accompanying the data release.
Overall trade grew 46.4% as waves of government stimulus and congressional clearance of three pension fund withdrawals boosted consumption, the bank said.
Services increased 17.8%, driven by the health and education sectors, although the bank noted that even hotel, restaurant and transport activity had started to revive, operating at a slower pace.
Mining, a key industry in Chile, the world’s leading copper producer, fell slightly after a year in which it had kept pace with production despite the pandemic. However, the production of goods in the manufacturing and construction sectors soared in June.
In June, the economy grew 2.1% compared to the previous month, which points to an annual growth higher than initially expected for 2021 in the South American nation, analysts said.
“We do not anticipate such a sudden recovery in activity during a period of inbound and outbound mobility restrictions,” consultancy Oxford Economics said in an analyst note. “We have revised our GDP forecast to 8.5%, from 7.6% previously, but we do not rule out a much more pronounced correction after political stimulus wears off in 2022.”
Coronavirus cases have plummeted in recent weeks in Chile, where 65% of the population has been vaccinated https://graphics.reuters.com/world-coronavirus-tracker-and-maps/vaccination-rollout-and- access, according to a Reuters Count, which marks one of the fastest vaccination campaigns in the world. (Reporting by Fabian Cambero and Dave Sherwood in Santiago; Edited by Andrew Cawthorne and Matthew Lewis)