Minister Felipe Larrain and Economist Ricardo Caballero Analyzed the Current Macroeconomic Landscape
According to the
finance minister, the Chilean economy is experiencing a period of moderate
deceleration and its major strength is its fiscal position.
Caballero indicated that the world is in a transitional phase where developed countries are recovering and emerging markets are slowing down.
In order to analyze the current economic situation and provide macroeconomic perspectives on Chile and the world, Grupo Security hosted a seminar this morning in the W Hotel entitled “A Solid Outlook in Unstable Waters”, featuring Felipe Larraín, Chile's finance minister, and Ricardo Caballero, the accomplished economist and Ford International Professor of Economics and director of MIT's World Economic Laboratory.
The event was a great success and attracted an audience of more than 1,000 that included Grupo Security customers, corporate executives from leading Chilean companies, scholars and opinion leaders. It also registered over 2,500 connections via streaming.
At the event, minister Larraín indicated that along with the recession in Europe, there is a downturn in China and in the main emerging nations in Latin America. In this context, Chile is also experiencing a downturn, albeit moderate. While investment has been growing at lower rates than before, he highlighted that consumption continues to grow and inflation is under control at 2.2% for the last twelve months. “It is a reality that few countries in the world are enjoying.”
The minister dismissed the idea that Chile had suffered fiscal deterioration. “This government has restored the fiscal accounts. We went from a structural deficit of -3.1% (of GDP) to -1%. Whoever wins the election next year will inherit healthy fiscal accounts," remarked the minister. "Everyone has a right to their own opinion, but not their own figures. All governments are responsible from the starting blocks to the finish line," he concluded.
He also highlighted the government's efforts to create jobs. As he indicated in his presentation, close to 830 thousand jobs have been created, of which 93% are classified as quality jobs—with an employment contract, health insurance and social security—and less than 7% are substandard. However, he recognized that the female participation rate continues to be a pending challenge.
Economist Ricardo Caballero expressed concern for the current signs from China, mainly as a result of Chile's exposure to that economy. Along that line, Caballero remarked that among commodity exporters, our country would be harmed by a potential slowdown in investment from China, together with Brazil and other emerging countries in Latin America.
"We want good news from the United States, moderately good really, but what we are definitely interested in is hearing good news from China, period," he said.
He also expressed that “European short-term figures are extremely good but I don't have a very optimistic outlook for the medium term. The same happens with Japan, where numbers are very positive in the short term but for which I don't have a positive medium-term outlook either. However, from a short-term macroeconomic perspective, developed countries as a whole are better off than they have been for the last five to ten years.”
Grupo Security–a diversified financial group that offers its customers consistent, high quality service–organizes an economic seminar every year in order to analyze domestic and global economic projections and trends, while contributing to the community by addressing topics of interest for the country's development.