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LatinNews Daily - 02 February 2021

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In brief: Chile’s economic activity contracts in December

* Chile’s central bank (BCCh) has released the latest figures for the monthly index of economic activity (Imacec), according to which the Imacec contracted 0.4% year-on-year in December 2020. The BCCh notes that 10.8% annual growth in the retail sector was insufficient to compensate for a 2.4% fall in the production of goods (with notably a 9.2% contraction in the mining sector) and a 2.1% drop in the services sector. In seasonally-adjusted terms, the Imacec expanded 3.5% compared with November. Finance Minister Rodrigo Cerda has nevertheless declared the December 2020 Imacec to be a “positive surprise” as financial markets had predicted a yearly contraction in excess of 1%. Noting that 2020 was a “very complicated year for Chileans”, with an expected GDP contraction of 6%, Cerda stressed that there is “urgent” focus on economic recovery. However, some analysts now expect a negative economic performance in the first quarter of 2021, as the coronavirus (Covid-19) pandemic persists.