World: 270mn doses have been administered. Chile in the top 6.



Chile continues with formidable pace of vaccination, albeit decelerating in the margin due to the vaccination of lagged groups.



More than 3.6 mn doses have been administered in Chile (Pfizer & Sinovac). Johnson & Johnson vaccine (also purchased by Chile) has shown promising results in the US.



Strong injections of liquidity from pension funds and middle-class bonus continue to support private consumption. The level of purchases remains at highs after the second round of pension asset withdrawals.



Supermarkets and retailers are the big winners.



January GDP grew 1.3% m/m, with a fall of -3.1% y/y explained by fewer business days in Jan-21 vs Jan-20. Economic recovery continues, supported by services.



Slow and heterogeneous recovery. We still see downside risks, especially in private investment, associated with a persistent domestic political uncertainty and deep weakness in the labour market. We project 6% y/y growth as a lower bound in 2021.



As of December, the investment projects in the pipeline for the period 2020–24 reached a value of USD 64,172 mn. For 2021–24, investment was adjusted upward by USD 3,300 mn (7.4%), mainly in mining (Codelco) and public works.



About 56% of the projects are in the construction stage. Investment decisions exposed to high uncertainty and low demand.



The unemployment rate decreased to 10.2% in January 2021 (not a good labour market thermometer). The workforce is increasing more rapidly than employment, as is to be expected as mobility restrictions are lifted and more active searches for employment begins.



Job creation continued to slow down in January, increasing by only 95k jobs compared to the previous month, and about 1 mn jobs lost due to the pandemic still need to be recovered.



Service sectors with the greatest physical interaction continue to lag the farthest behind in terms of job recovery. Commerce continues to recover jobs.



Total loans have begun to contract (in real annual terms) led by the slowdown in commercial loans. Credit flowed counter-cyclically to firms for much of 2020, but at the end of February, the slowdown in commercial loans continued and the decline in consumer loans deepened. Mortgage loans have stabilized.



February CPI stood at 0.2% m/m (2.8% y/y), slightly below expectations (0.3–0.4% m/m). Withdrawal of pension assets was felt strongly again in goods and fuel prices (gasoline) contributed strongly. For March, we estimate inflation of 0.4% m/m (3% y/y).



In line with the gradual economic recovery with short-term inflationary pressures (second round of withdrawals from pension funds), the central bank indicated that the benchmark rate would remain at its technical minimum (0.5%) “for a large part” of the monetary-policy horizon.



Electoral timeline



Constitutional process starting 2021

Main issues to be discussed in the constitutional process:


The myth of the minimalist constitution



Economic Outlook


Source: Scotiabank Economics.


Scotiabank Chile

Jorge Selaive, Head Economist - Chile
+56.2.2619.5435 (Chile)


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