Stimulus Check – UPDATE 1-Chile’s economic activity soars in June as recovery takes hold
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SANTIAGO, Aug 2 (Reuters) – Chile’s economic activity jumped 20.1% in June, the central bank said on Monday, boosted by a low basis for comparison the previous year and aided by one of the world’s fastest vaccination drives.
The bank’s monthly IMACEC economic activity index encompasses about 90% of the economy tallied 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 lock down much of the country. But a fast-paced vaccination drive has more recently begun to tame the rate of infection, allowing the economy to once again hit its stride.
“All the components of Imacec grew compared to the same period of the previous year,” the central bank said in a statement accompanying the data release.
Commerce overall grew 46.4%, as waves of government stimulus and the authorization by Congress of three pension fund withdrawals boosted consumption, the bank said.
Services jumped 17.8%, boosted by the health and education sectors, though the bank noted that even hotel, restaurant and transportation activity had begun to revive, albeit at a slower pace.
Mining – a key industry in world top copper producer Chile – fell off slightly after a year in which it had largely kept pace with output despite the pandemic. The production of goods by the manufacturing and construction sectors, however, spiked in June.
The economy in June grew 2.1% over the month before, pointing to higher year-long growth than initially expected for 2021 in the South American nation, analysts said.
“We didn’t anticipate such a sudden recovery in activity during a period of in-and-out mobility restrictions,” said consultancy Oxford Economics in an analysts’ note. “We’ve revised our GDP forecast to 8.5%, from 7.6% previously, but don’t rule out a much sharper correction after policy stimulus fades in 2022.”
Coronavirus cases have plummeted in recent weeks in Chile, where 65% of the population has been vaccinated here, according to a Reuters tally, marking one of the world’s fastest vaccination campaigns. (Reporting by Fabian Cambero and Dave Sherwood in Santiago; Editing by Andrew Cawthorne and Matthew Lewis)