"4.2% growth in July boosts the Chilean economy towards recovery."

The Chilean economy has exceeded expectations in July 2024, recording significant growth of 4.2% compared to the same month last year, according to a report released this Monday by the Central Bank. This increase marks the second best result of the year, only surpassed by the rise in February. The Monthly Index of Economic Activity (Imacec), which is a forward-looking estimate of GDP and covers approximately 90% of the country's goods and services, has shown much more robust performance than analysts had anticipated, considering the modest growth of only 0.1% in June. Economy Minister Nicolás Grau emphasized the importance of interpreting these numbers in a balanced way. "This positive growth that our economy is showing is balanced, meaning it has been present across various sectors of the economy," he commented. Grau stressed that one should not overreact to these figures, but rather it is essential to observe the evolution of the economy on a quarterly basis to assess its strength in a sustained manner. The seasonally adjusted Imacec also showed positive results, achieving a growth of 1%. According to the Central Bank, this growth is attributed to the expansion of all components of the index, particularly highlighting contributions from the services and industrial sectors. In particular, the production of goods grew by 3.4%, driven by activity in industry and mining. Commerce also demonstrated solid performance, with an increase of 4.9%. This growth is partly attributed to the recovery of the sector, which has benefited from a rebound in demand. Services, for their part, experienced a rise of 5.3%, with the education sector being one of the main drivers of this growth, due to a change in the school calendar that allowed for an additional week of classes. The recovery of the Chilean economy has been notable, especially following the devastation left by the pandemic. In 2021, Chile saw a historic GDP increase of 11.7%, but in 2022 it began to experience a slowdown, closing the year with a growth of 2.4%. As the economy adapts to the new normal, the main challenge for 2024 is to maintain sustainable growth and avoid falling into a recession. Inflation, which has remained contained around 5%, represents another critical aspect of the country's economic agenda. Although Chile managed to avoid a recession in 2023, it closed the year with virtually zero growth, highlighting the need for policies that stimulate investment and consumption. In this context, President Gabriel Boric took the initiative to create an 'Economic Growth Cabinet' at the end of last year. This new team, composed of several ministers, has the mission to promote and accelerate investment projects in both the public and private sectors, and to strengthen key sectors for the national economy, such as mining and construction. Expectations for the coming months are cautiously optimistic, with analysts suggesting that the growth recorded in July could be an indication of a broader trend towards recovery. However, it is essential for the government and the private sector to work together to create an environment that favors investment and sustainable development. As we move into the second half of the year, attention will be focused on how the Chilean economy performs in the coming months. Chile's ability to maintain its growth and face global challenges, such as fluctuations in the copper market and inflationary pressures, will be crucial to ensuring a prosperous future.