The economy of Chile rebounded in an impressive way during July 2024. It showed a 4,2% rise from the month before, and exceeded expectations.
The latest IMACEC data (Monthly Economic Activity Indicator) shows a significant turn around following a difficult June.
IMACEC, a composite index that aggregates activity in various sectors of the economy to predict GDP trends, provides a snapshot of both Chile’s progress as well as its ongoing economic challenges.
IMACEC Index in Chile rises Year-on-Year
The IMACEC Index for Chile rose 4.2% in July compared to the previous year, exceeding expectations of 2.7% and recovering from June’s modest increase.
The extra day of work in July often leads to a boost in productivity.
Manufacturing played an important role in the recovery, as production increased by 3,4% in July, compared with 2% in previous months.
Manufacturing output rose by 7.8% in July, an impressive recovery after a decline of 1.7% in June. This shows the resilience of this sector.
The mining industry, which is a keystone in Chile’s economic growth, has grown at a slower rate, 3.6%. This compares to a 6% increase recorded by June.
Production in other sectors increased marginally, by 0.9% compared to 1.9% last month.
Some industries are still struggling to grow, indicating uneven growth.
The services and commerce sectors are showing signs of revival
In July, the services sector improved significantly, with a growth of 5.3% on an annual basis, after a decline of 1.8% in June.
The services sector is a major contributor to Chile’s employment and diversity, so this recovery is vital for the overall health of Chilean economy.
The trade sector also expanded at a rate of 4.9% in July, compared to the 5.8% growth observed in June.
The softer growth in trade suggests that consumer demand may be unstable, and will need to be closely monitored.
Chilean economic activity increased by 1% on a monthly adjusted basis in July after a 0.4% rise in June.
The upward trend in confidence is a reflection of the growing economy.
Chile’s June data, on the other hand, painted a much more depressing picture.
IMACEC’s index only showed an increase of 0.1% year-on-year. This is a significant drop from May’s 1.1% and falls short of market expectations for a 1.7% rise.
The recent growth was the lowest in the six-month cycle. This raises concerns over the sustainability of the gains.
Overall results were dampened by a decline of 1.8% in the services sector and a slower 4.3% growth in the trade sector.
The data for June also showed that the seasonally-adjusted economic activity had increased modestly by 0.4%.
Chile’s economy is volatile, as the figures from June and July show.
The 4,1% increase from June to Juli highlights the possibility of recovery and importance of maintaining the economic momentum.
The strong performance in July suggests that a shift has occurred, whereas the challenges of June point out underlying problems which need to be addressed.
This dynamic underscores the importance of adapting economic policies in order to support growth and vulnerable sectors within the changing global environment.
It is important to monitor these trends in order to understand Chile’s economy and ensure resilience within a changing environment.
The post Chilean economic growth increases by 4.2% after a weak June, this article may change as new information becomes available.
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