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Despite overall slowing down in Chile, Magallanes region continues to grow

Saturday, August 23rd 2014 - 07:14 UTC
Full article 5 comments
Despite less Argentines tourists and coal market with little demand, fisheries, aquiculture, beef and wool have helped the region's economic activity Despite less Argentines tourists and coal market with little demand, fisheries, aquiculture, beef and wool have helped the region's economic activity
A good cruise season for Punta Arenas also helps boost retailing, textiles, restaurants and related activities A good cruise season for Punta Arenas also helps boost retailing, textiles, restaurants and related activities

Although overall Chile is undergoing a period of economic deceleration, which the government is trying to address with lower rates and full execution of public works investments, the Magallanes region in the extreme south of the country was among those with the best performance in the second quarter having expanded a healthy 2.8%.

 According to the Regional economic activity index, Inacer, Magallanes in April-June expanded 2.8% over the same period a year ago, and thus increasing 9.8% in the first half of the year, the fastest in Chile.

However Paul Gnadt head of the Economy ministry regional secretary, the index is not that solid in the long term horizon: “Yes there is a positive growth and even more if we analyze both quarters. But looking in detail there is something wrong in the economic structure of the region, that is why our ups and downs”.

And some of the sectors contributing to this less enthusiastic attitude are construction, housing, retailing, restaurants and hotels. “Deceleration is a slow term process, and different sectors add up, to which in this case we must include financial turmoil in Argentina which has had an impact on retailing and tourism”.

Likewise and surprisingly, mining also declined particularly the open pits at Pecket, close to Punta Arenas, and this because of lower global coal prices.

“All this comes to show the fragility of our current economic structure, the strong dependency of the Argentine market and of mining and of oil and gas if we eventually find enough in commercial volumes”.

While on the positive side, Gnadt mentioned aquiculture and fisheries, with an increase in Atlantic salmon harvest; manufacturing, mainly methanol; beer; beef production; textiles; fishing canning; forestry plus beef and wool.

Summing up, despite the slowdown there are sectors that have managed to outstand such as agriculture, livestock and aquiculture which helps pull power, transport and financial services. The regional economic cabinet should be meeting in the near future to assess results and identify those areas that are helping to prop the local economy.

Categories: Economy, Chile.

Top Comments

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  • Briton

    region continues to grow,,
    and why not, its nice to grow,

    unlike some south American countries we can name..lol

    Aug 23rd, 2014 - 06:15 pm 0
  • Sergio Vega

    Yes, but the Región and the country would have a bigger vgrowth if the present leftist Gvt. were from center right side as it was the 4 years before.....

    Too many changes and all at the same time in a world crisis condition is not a good way to grow....Bunetter is to reorganize and reinforce the actual status giving cionfidence to the investors which are by now avoiding to go on in a planned new projects or to develope the existing because the changes to come and the bad marketing against the companies and enterpreuners from Gvt. and it deep leftist supporting alliance speakers.....
    Meanwhile, investiment is going to our northen neighbor Peru from foreign and Chilean investors....where the investing conditions are very very better that here....
    Poor Chilito.....we are R.I.P.....by now.....!!!
    Despite we have just only 5 month in those dangerous hands......what we can expect next years....???.......more poverty, unemployement, decrease, civil unrest, worse educaticon, health and housing, etc. etc., the contrary to the last 4 years with the previous president......

    Aug 23rd, 2014 - 06:49 pm 0
  • The Chilean perspective

    The new leftist government is trying to create a diet version of the Argentine model in Chile and is scaring the pants off investors. Ms Bachelet took over 8 months ago and growth has gone from a healthy 4.7% in the third quarter of 2013 to a devastatingly poor performance of only .8% last quarter, way below any market expectations. Unemployment has shot up in Santiago from 5.2% to 6.6% in eight months and crucially the construction sector has experienced the worst effects with their rate up to 10.7%.
    The economic dimwits at the helm expected their stupid, ill conceived, back of a napkin tax reform package to reap in 8 billion in additional revenue. They were then to inject the loot into tertiary education and the remainder into nationalizing the private schools. This has now turned into SH@T. The economic contraction, capital flight to Peru and Colombia and the fact that investment has come to screeching halt will mean that the 8 billion she was going to reap has simply vanished. In contrast, our economy generated an additional 12 billion of government revenue last year as it grew 4.1%. There are dark clouds in the sky for us, as next quarter will bring negative growth and severe pressure on the budget and the peso.
    One last thing.... since taking over, the leftist government officials have taken special care of their relatives giving them over 50% of the high paid staff jobs.

    Aug 23rd, 2014 - 10:08 pm 0
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