Chilean economy faces major slowdown

Published 19 March 2010

The two areas hit hardest by the 27 February quake account for 13 percent of Chile’s gross domestic product and 20 percent of its industrial output, and some sectors of the economy will have to rebuild from scratch

The Chilean economy faces a major slowdown and a difficult recovery from the effects of last month’s 8.8-earthquake, officials and business leaders say. A majority of economists speculate Chile will absorb the economic shocks of the 27 February quake better than most other countries might have been able to because of the government’s prudent handling of the economy, the New York Times reported Monday. The two areas hit hardest by the quake, however, account for 13 percent of Chile’s gross domestic product and 20 percent of its industrial output and some sectors of the economy will have to rebuild from scratch.

UPI reports that in the fishing center of Talcahuano, the quake and a subsequent tsunami destroyed fishing boats and shipping containers — and forced an emigration of fish, forcing the industry to “discover this fishing region all over again,” fisherman Alfonso Alvear said.

The quake struck just as the city’s 2,000 fishermen were set to begin the four-month fishing season, which was scheduled to begin Monday but which fishermen say has been lost.

A slowdown in other critical industries — including pulp and paper, wine and agriculture — is expected to persist for at least a few months, the Times reported. Seaside economies are expected to take much longer to rebound. Rodrigo Jordan, chairman of the Santiago research institute Foundation for Overcoming Poverty, said coastal villages and towns have lost their local economies. “They can rebuild their homes and find clothes,” he said, “but how can they sustain their families without a local economy?”