(Bloomberg) — Chile’s economic activity rose for the second straight month on increases across multiple sectors, bolstering government claims that the recovery is gradually gaining strength.
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The Imacec index, a proxy for gross domestic product, increased 0.8% in February compared to January, less than the 1% median estimate in a Bloomberg survey. Still, January’s month-on-month rise was revised higher, to 2%, the central bank reported on Monday.
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The index also gained 4.5% from the year prior, marking the biggest annual jump since May 2022.
Chile’s economy is gaining traction after political tensions, weak demand and high inflation weighed on activity in 2023. The central bank is expected to extend its cycle of rate cuts on Tuesday, and sectors including manufacturing and retail are improving. The government is sticking with 2.5% growth forecast for this year, which would be above the Latin American average.
Read more: Chile Central Bank Chief Plans to Unwind Tight Monetary Policy
What Bloomberg Economics Says
“Monthly data signal the economy is growing faster than analysts and policymakers anticipated. The outsize results highlight fewer downside risks to growth and inflation, and should moderate market expectations for the central bank easing cycle.”
— Felipe Hernandez, Latin America economist
— Click here for full report
Mining activity increased 2.5% on the month in February, according to the central bank. Industry jumped 2.1% during the period, while services rose 0.5% and commerce ticked up 0.4%.
Policymakers are expected to lower borrowing costs by 75 basis points to 6.5% tomorrow according to analysts in a Bloomberg survey, down from 11.25% at the start of the easing cycle in July. Central bankers have signaled plans to bring rates to a neutral level near 4% in the second half of the year.
Separate data published Thursday showed retail sales, manufacturing and industrial production posting faster year-on-year growth in February than economists had expected. Unemployment ticked up to 8.5% during the month.
The recovery in Chile’s growth will help improve the business environment as the government lures investments in sectors such as lithium, Economy Minister Nicolas Grau said in a March interview.
–With assistance from Giovanna Serafim.
(Updates with details from the activity report in the third paragraph, economist quote in fifth paragraph)
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
