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Economic Survey of Latin America and the Caribbean 2010-2011

International Integration and Macroeconomic Policy Challenges Amid Global Economic Turmoil

image of Economic Survey of Latin America and the Caribbean 2010-2011

This publication is issued annually by the Economic Development Division of the Economic Commission for Latin America and the Caribbean (ECLAC). This sixty-third edition of the Economic Survey looks at the nature of the recovery from the financial global and economic crisis whose fallout spread across the region in the second half of 2008 and in 2009. It also delves into the challenges posed by highly liquid conditions in international financial markets combined with high prices for the region’s key commodities. Finally, it analyzes the situation in the countries of Latin America and the Caribbean during 2010 into the first part of 2011.

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Chile

The pattern of economic activity in 2010 was shaped by recovery from the crisis of 2008-2009 and the February earthquake, which struck a large area of the country and caused extensive damage to infrastructure. Until the earthquake, the economy had been well on the road to recovery from the impact of the global financial crisis, which heavily weakened domestic demand amid deteriorating growth expectations in 2009 and a drop in exports, albeit softened by China’s robust demand for raw materials. Production slumped in the first quarter of 2010 following the earthquake, but began to rebound in the second semester as domestic-demanddriven sectors of production were buoyed by rising consumption and investment, and export sectors by external demand. Employment rates rose, which also contributed to this pattern. Thanks to this combination of factors —together with the low basis for comparison owing to the contraction of economic activity in 2009— GDP expanded at an annual rate of 5.2% in 2010, unemployment eased down throughout the year to average 8.2% (as against 11% in 2009) and year-on-year inflation stood at 3% over 2009 in December.

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