Despite several large earthquakes, trapped miners and a copper mining strike that halted production of its largest natural resource, the iShares MSCI Chile (NYSEArca: ECH) and the Chilean economy still improved in 2010.
If you thought the troubles that dogged the Chilean economy last year brought it down and scared off investors, you thought wrong:
- President Sebastian Pinera stated that “in 2010 the economy grew 5.2% and 428,000 new jobs were created while salaries grew 4%,” reports Carolina Pica for The Wall Street Journal.
- Pinera plans on creating one million new jobs and maintaining GDP growth of 6% over his 2010-2014 term. Additionally, the government wants to eliminate poverty by the end of this decade.
- According to median estimates, Chile’s economic output for January increased 6% year-over-year as industrial output, copper production and retail sales helped boost the economic performance, writes Carolina Pica for The Wall Street Journal.
- Local brokerage Inversiones Security attributes believes that the “domestic spending continues to be the driving force fueling the economy, while mining shows signs of recovery.”
- Furthermore, “construction permits, an indicator for the construction sector, also surprised positively with an expansion of 32.2% year-over-year, which is the second consecutive month with a positive annual variation for this index,” remarked local investment bank Celfin Capital.
ECH, for its part, gained 44.8% in 2010, putting it among the best emerging market ETFs last year.
Finance Minister Felipe Larrain emphasized inflation remains a significant threat to economic progress, according to Reuters. The Central Bank has raised rates to calm inflationary worries, and the market is betting on near-future increases, as well. [Global X Launches Andean ETF.]
For more information on Chile, visit our Chile category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.