MercoPress. South Atlantic News Agency

Magallanes Region expanded 7.5% in first quarter

Chile's Regional Economic Activity Index (Inacer) carried out by the National Statistics Institute (INE) shows the country's central and southern regions performed best in this year's first quarter. The INE excludes the Santiago Metropolitan Region in its assessments.

Maule, in Chile's central Region VII, recorded an economic growth rate of 7.5% in the first three months of 2006 compared with the same period last year. Arcadio Cerda, an economist from the Universidad de Talca, says it is "thanks to areas like the service sector" which has helped maintain the region's economic growth. Cerda also points to greater business confidence leading to infrastructure development and cellulose production as helping sustain economic activity.

The arrival of commercial centres and malls has also led to a boom in regional spending.

The same dynamism was recorded in the southern Region XII of Magallanes where the introduction of cars and supermarkets in the Punta Arenas "zona franca" tax free zone propelled spending and helped the area record a 7.5% increase in the first quarter's economic activity.

However, Lorena Araya, the acting regional ministerial secretary (seremi), said the index would have risen only 0.2% had it not been for the production of Methanol.

The Canadian company Methanex currently operates out of Magallanes.

In fact, the farming sector marked a sharp drop in economic activity mainly due to the halt on wool exports until the value of the dollar rises.

Chile's Gross Domestic Product grew 5.3% in the first quarter. Five regions ? XII, X, VIII, VII, and VI ? recorded an economic growth rate above the national 5.3%.