Many times people describe us economists as experts in explaining why our predictions about the future did not come true in the past. Perhaps some of that reputation is deserved, but it is fair to say that in this small specialty of the profession (the vast majority of economists do not make projections) we never pretend to guess the future, only to describe more likely scenarios using information from the past.

Our most recent failure was the Imacec projection for January, the first of 2021, after a 2020 to forget for reasons we all know. The 3.1% drop in activity compared to the same period last year was 2 percentage points below the average estimates of the market and of the writer of these lines, which, for this type of forecasts is quite a lot.

Immediately, reactions turned to pessimism. That recovery was in danger, that the vaccination process was not bearing fruit, that the damage had been deeper than thought, and so on. Our response: calm. Although the figure was disappointing, the reasons behind it seem to be more technical-statistical than economic. Moreover, let's remember that we are comparing ourselves with last year's "San Juan summer", the period between the social outbreak and the beginning of the pandemic, when activity was beginning to improve.

However, a closer analysis shows that the figure is actually quite positive. Compared to December, and eliminating seasonal effects, there was an increase of 1.3%, which is quite a lot. But not only that, since, by sectors, those that were growing the most with respect to the last month of 2020 were precisely those that showed the greatest stagnation: mining and services. Moreover, a sector that was slowing down after the effects of the first withdrawal of AFP funds - commerce - increased again at the margin.

As it could not be otherwise, we will continue to feed the cliché: for February we are projecting a new year-on-year contraction, around 1%, but it would be the last one before showing quite impressive growth figures, which would even exceed double digits as of May. Thus, in 2021, GDP would grow by 6.5% and we do not rule out a little more. And if this does not happen, you know that we will be here to explain our mistake.

Nathan Pincheira

Chief Economist, FYSNA