Itaú BBA - A delicate start to 2021

Scenario Review - Chile

< Back

A delicate start to 2021

January 14, 2021

A swift vaccination rollout could compensate a weaker start to 2021.

For the version with all charts and tables, please open the attached pdf file

• Last year ended with the second payout of pension withdrawals, sustaining activity. Meanwhile, surging terms of trade and the beginning of the vaccination process are factors favoring the sustainability of a recovery.

• High copper prices and lower external savings (from public and private sector) have benefitted the Chilean peso. Ahead of a potentially turbulent political scenario in 2021 and acknowledging the expiration of the flexible credit line with the IMF in 2022, the central bank took the opportunity to announce a USD 12 billion reserve accumulation program, starting in January.

• In the short term, tighter mobility restrictions during the onset of the second COVID-19 wave mean activity could slow down before regaining pace after the first quarter of the year. We still see GDP bouncing back, with growth of 6% this year.

• Controlled inflation (we expect 3% by the end of this year) favors an extensive period of significant monetary stimulus (we see rates stable, at 0.5% during 2021), in order to aid the recovery.

Joao Pedro Resende
Miguel Ricaurte
Vittorio Peretti 

For the version with all charts and tables, please open the attached pdf file



Download PDF Print
< Back