Friday , January 22 2021

Chile is third in job creation despite the leading GDP growth in the region

The economic growth that the country will register in 2018, about 4%, the expected increase of 3.6% in 2019 and 3.5% in 2020 (according to the Central Bank's survey) are data that the government is proud, after 4 years of weak dynamics of the previous administration.

Indeed, the expectations of both the LatinFocus Consensus Forecast and the aforementioned survey of expectations show that the domestic economy has a better return than average global growth (with expected GDP of 3.3% this year, 3.1% in 2019 and 2.9% in 2020), as well as Latin America, which predicts only 1.7% this year; 2.3% in 2019 and 2.6% in 2020.

But as it has become clear in recent months, the labor market has shown weaknesses, and job creation in particular has been at the heart of the controversy over the Central Bank's diagnosis, according to which official surveys underestimate the effect of immigration in the country.

Facing this scenario, according to official data published in September and October, Chile is third in terms of job creation after economies like Mexico and Brazil.

Thus, according to the data, employment creation of the domestic economy grew by 1.01%, while the Mexican economy grew by 6.49% and the Brazilian – 1.48%.

In any case, Chile exceeded job creation Peru (0.83%) and Colombia (0.71%).

According to these figures, Labor Minister Nicolas Monkeberg said that "any analysis made with objectivity about the employment of this government should consider under what conditions we should get a job when we arrived in March," he said.

In this context, he explained that "private contracts have been destroyed in Chile just a year ago, according to pension management, more than 150,000 private contracts are created with contributions, and according to INE, over 80,000.

And he added, with regard to the differences in figures found by the Central Bank in connection with employment surveys, that "we are sure that regardless of the number to be used for measuring, this is on the rise" and that in the next few months will see better data on job creation.

"We are reactivating the economy when activity increases to 4% and investment is increasing as it has increased if better jobs are noticed and this will undoubtedly be seen more strongly over the coming months," he said.

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