MercoPress. South Atlantic News Agency

Recession in Punta Arenas

For the second consecutive quarter economic activity in Magallanes Region has been negative which technically means the area is in recession. However the regional representative of the Chilean Ministry of Economy, Bernardo Troncoso believes that the second half of 2003 will see a strong recovery.

"The activity index for the second quarter dropped 4,2% compared to a year ago, and 7,2% if we exclude methanol production", indicated Mr. Troncoso.

During the first quarter, (January-March), Magallanes activity index contracted 0,5% and 0,9% if the methanol industry is not included, according to the official statistics made public by Mr. Troncoso.

"This means that in the first half of 2003, we have experienced an activity contraction equivalent to 2,4%, and 4,05% without methanol compared to a year ago", said Mr. Troncoso who nevertheless insisted he was optimistic for the second half: "exports in these last six months have expanded vigorously, 68,5% to Asia and 67,5% to Europe, which makes us look forward to a more expansive second half".

According to the official release, mining, fisheries, construction, agriculture and forestry had a negative performance in the first two Q of 2003, while energy, gas, water, commerce, transport, communications and housing experienced "promising growth".

However employment has remained stable and exports during the second quarter increased 29%.

"Even when economic indicators so far have been disappointing, we believe that government business promotion bills plus the robust performance of exports that increased 30% excluding methanol, will mean a significant change in expectations for the rest of the year", stressed Mr. Troncoso.