Chile's economy 'will bounce back quickly'
By Gideon Long
Over 450 people have died and hundreds are still missing
Despite the devastation it caused, last Saturday's Chilean earthquake won't have a serious long-term impact on the economy, and it might even boost growth this year by fueling a boom in the construction industry.
Analysts and the government say first half gross domestic product (GDP) will undoubtedly suffer, as those regions worst hit by the quake grapple with energy supply failures and temporary transport problems.
But after that, the economy should bounce back rapidly.
"Activity will drop for one or two quarters," said Alberto Ramos, senior emerging markets economist at Goldman Sachs in New York.
"Then we're likely to see a very quick rebound as things normalize and as the reconstruction effort gives an extra kick to GDP."
Investment bank JP Morgan even went so far as to upgrade its growth forecasts for Chile in response to the earthquake.
It said the construction boom would push annual expansion this year and next to 5.5%, an improvement on its previous forecast of 5.0%.
By Gideon Long
Over 450 people have died and hundreds are still missing
Despite the devastation it caused, last Saturday's Chilean earthquake won't have a serious long-term impact on the economy, and it might even boost growth this year by fueling a boom in the construction industry.
Analysts and the government say first half gross domestic product (GDP) will undoubtedly suffer, as those regions worst hit by the quake grapple with energy supply failures and temporary transport problems.
But after that, the economy should bounce back rapidly.
"Activity will drop for one or two quarters," said Alberto Ramos, senior emerging markets economist at Goldman Sachs in New York.
"Then we're likely to see a very quick rebound as things normalize and as the reconstruction effort gives an extra kick to GDP."
Investment bank JP Morgan even went so far as to upgrade its growth forecasts for Chile in response to the earthquake.
It said the construction boom would push annual expansion this year and next to 5.5%, an improvement on its previous forecast of 5.0%.
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