The Department of Studies maintained its GDP estimate for this year at 3.7% and sees a rate hike in the last quarter of the year.
The Chilean economy would have shown growth in March this year not seen since at least the beginning of 2013, mainly due to the negative comparison base of the same month last year.
This is foreseen by the BICE Inversiones research department, which in its Monthly Economic Report anticipates that the Monthly Economic Activity Indicator (Imacec) for the past month would have increased by 5.5%, its biggest jump from 5.4 % annotated in January 2013.
The research economist, Antonio Acha, explains that the factor behind the biggest expansion is the low comparative base last year, due to the impact of the strike at Escondida. The Imacec, in fact, did not grow in the third month of last year.
“Although we still have to wait for the sectoral figures of March delivered by the INE, it is possible that we see monthly setbacks in the figures of mining and manufacturing activity and even then we can see a growth of the activity above 5%,” argues Acha.
On the positive side, he points out, trade will continue to be an “important support” for the recovery of local activity, where sales of durable goods (mainly automobiles) would push trade activity to grow by around 3.5% .
BICE Inversiones ratified its growth forecast for this year by 3.7%.
“The important thing now for local activity will be to stop sustaining good monthly growth figures on a comparable basis and begin to register real increases in production at the aggregate level. The challenge of this will be much more evident as of May, where the low growth records of 2017 will be left behind and the performance will be totally dependent on sectors that have lagged behind in recent years, such as manufacturing and mining, to resume dynamism, “he explains. Acha
In terms of monetary policy, BICE Inversiones projects that the Central Bank will maintain the interest rate at the current 2.5% until the end of this year, applying an upward adjustment of 25 basis points towards the fourth quarter of the year.
Regarding inflation, the study department warns that the low Consumer Price Index (CPI) for March will lead to the 3% convergence being “somewhat slower” than expected. Thus, they cut their inflation projection for this year from 2.5% to 2.3%. In this scenario, they anticipate that the dollar will end the year trading at $ 590 per unit.
Gemines raises need to boost investment
“The growing risks of a trade war between China and the US, financial risks and others of geopolitical nature, can muddy enough the panorama so that 4% is not reached this year and it becomes increasingly difficult to achieve it in the coming years ” This was stated yesterday by the Gemines Studies manager, Alejandro Fernández.
However, the consultant’s report warned that the data for the first two months point to a good start for the year, beyond the distortion that the effect of the Escondida strike implies.
The best spirit, he said, is simply the result of the favorable change in expectations resulting from the change in government, so that it has, in essence, a one-time effect, “so it is fundamental to generate conditions so that The three investment points, lost during the previous government, are recovered as soon as possible. “