Chile’s economy appears to be recovering from the recent slowdown, with retail sales and services offsetting the drop in mining activity. According to the country’s central bank, the economy grew 2% in February, compared to the same month in 2014.
Although below the 2.7% growth the country experienced in January, that figure confirms that the South American country is steadily easing out of recession.
The figures come from the Central Bank’s Monthly Economic Activity Index, or Imacec, which incorporates 91% of the goods and services included in the gross domestic product (GDP).
Chile’s economy slowed down last year as the demand for commodity decreased substantially in the global marketplace. Chile is one of the biggest exporters of minerals, particularly copper.
The drop in commodity prices halted mining activity in several sites across the country, leading to the loss of thousands of jobs. In August last year, unemployment rate rose to a record 6.7%, while factory output shrunk by 4.9%.
Chile’s labor force numbered 8.36 million people in the three months leading up to last August, of whom 560,180 were unemployed. The primary cause of the slowdown, according to analysts, was the decreasing investment in mining, although the financial services and tourism sectors also shed a large number of jobs.
The central bank cut interest rates several times last year, but the banks continued to cut back on lending, blaming low consumer confidence. The latest figure from the central bank confirms that consumer confidence is improving, albeit slowly.
Throughout last year, there was a tremendous pressure on President Michelle Bachelet to inject money into the economy and reverse the trend. Now it seems Bachelet’s efforts are paying off.
Still, Bachelet must do more to keep the economy growing, because the Chilean peso has dropped 24% in value over the past two years.