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.
Max Chen contributed to this article.