Abstract
In the face of a harsh macroeconomic situation, particularly in Latin America,
Chile’s infrastructure
sector has a relatively positive outlook for
2009. This is largely due to two factors: Chile’s prudent fiscal
controls over previous years and a strong government stimulus plan announced
in January.
Chile' s impressive public finances in recent years have
enabled the government to put particular emphasis
on countercyclical
fiscal policy to stimulate economic growth and invest in infrastructure. The
Banco
Central de Chile' s outlook for 2009 is better than many other Latin
American countries, with BMI
forecasting a real GDP growth rate of 1.8%
year on year (y-o-y). The country has taken fiscal and
monetary measures
to save its economy, including a US$4bn stimulus plan in late 2008. As a
result,
neither BMI nor Chile' s central bank are forecasting a recession
for 2009.
Chile' s finance ministry published details of the proposed
stimulus programme on its website in early
January, and has cited the plan
as the cornerstone of government efforts to achieve 2-3% economic
growth
and maintain stability in the labour market. To achieve this, the proposed
measures will aim to
have a quick impact on the wider economy, focusing on
four key areas. BMI predicts that for 2009 the
construction industry in
Chile will be worth $13.5bn, equating to real growth of 5.0 % y-o-y.
The
build-up of solid public finances over the past five years has been the result
of prudent fiscal policy at
a time of soaring global metals prices –
including copper, Chiles main export – in stark contrast to the
region' s other large commodity exporters, such as Venezuela. Windfall revenues
have aptly been
deposited in overseas funds, some US$22bn of which are now
being tapped. Secure investment from the
energy sector in 2009 will also
create jobs and stimulate economic growth.
Chile' s power sector will see
growth in 2009 and help drive infrastructure with US$21bn already secured
towards new projects and US$7.7bn of construction underway. Projects such as
the construction of power
plants, transmission lines, and storage and
transport facilities at the country' s ports are all planned.
Several types
of new plants are also under development, from new coal power plants to the
largest wind
farm in Chile to date and extensive reforestation plans to
take advantage of biomass potential.
The energy sector is set to be one of
the only sectors that maintains high levels of investment despite the
crisis. This is good news for the sector, which has been seriously struggling
with capacity issues for
several years. Chile is hoping to achieve energy
independence through the construction of new capacity,
and BMI' s power
forecasts indicate that generation will outweigh consumption in 2009, with a
surplus of
3.8twh.
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