Chile’s struggling first quarter

Chile’s economy grew by 3 percent in the first quarter compared to last year’s 6.2 percent and is slower than a 4 percent rise predicted by Bloomberg estimates.

Despite the fact that Chile is experiencing energy shortages and high inflation as well as lower consumption, investment still continues to pour into the country.

Economic activities and industrial production have been affected as companies are facing supply restrictions in sectors like manufacturing, mining and electricity generation because of gas shortages as a result of the worst drought in half a century which lowered hydropower reserves.

The National Statistics Institute said today that the mining output declined by 2.7 percent whilst Copper output fell 8.4 percent in March as a result of labour shortages.

Shares of hydroelectricity generator Colbun SA increased by 12 percent this week as recent rainfall will help to fill reservoirs, reducing the risk of power shortages and help minimise disruption, a view shared by Energy Minister Marcelo Tokman in a statement today.

Antofagasta Plc, Anglo American Plc and Freeport-McMoRan Copper & Gold Inc have been affected by the shortages as between 45 percent and 70 percent of the electricity comes from hydroelectricity.

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