Economy

Chile Economy Falls Less Than Forecast as Key Rate Stays on Hold

Published

1 year ago

May 2, 2023

(Bloomberg) — Chile’s economic activity fell less than expected in March as services remained resilient, backing up the central bank’s insistence on keeping interest rates at an over 20-year high to cool inflation and consumption.

The Imacec index, a proxy for gross domestic product, fell 0.1% in March from the previous month, less than the -0.4% median estimate of analysts in a Bloomberg survey. From a year prior, activity declined 2.1%, the central bank reported on Tuesday.

Chile’s economy has held up better than forecast in recent months despite headwinds including above-target inflation, tight monetary policy and falling liquidity. In April, the central bank raised its forecasts for inflation, at the same time as opening up the possibility that gross domestic product may expand this year. Put together, there is no indication that borrowing cost reductions are near.

Read more: Chile’s Costa Dismisses Early Rate Cuts, Even as Inflation Slows

Services rose 0.9% on the month in March, the central bank said. On the other hand, both mining activity and commerce declined by 1.8% during the period.

Policymakers won’t cut rates until underlying inflation is on a clear downward trend, central bank chief Rosanna Costa said in an interview last month.

President Gabriel Boric rolled out a plan in April to develop the local lithium industry, with the government taking a controlling stake in future public-private partnerships in the largest brine deposits. It’s part of efforts to seek a bigger role for the state, while also attracting more private capital.

Still, critics such as Canadian mining billionaire Robert Friedland said the initiative will deter local investment and may hurt the clean energy transition.

–With assistance from Rafael Gayol and Giovanna Serafim.

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

2 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

3 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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Economy

Statistics Canada says manufacturing sales fell 1.3% to $69.4B in August

Published

3 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.

The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.

The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.

Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.

Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.

Overall manufacturing sales in constant dollars fell 0.8 per cent in August.

This report by The Canadian Press was first published Oct. 16, 2024.

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