Unab Poll: Economy Shows Signs of Improvement in April.

The Chilean Economy Barometer from the UNAB Institute of Public Policies shows a recovery in economic dynamism in April. "Unlike what was observed in March, the performance of the sub-indices is more positive, with advances in both the macroeconomic situation and consumer conditions," the report assesses. The UNAB Economic Index (IPP) weighs the performance of 24 economic variables, placing them on a plane divided into four quadrants representing different states: "good and improving," "good but worsening," "bad but improving," and "bad and worsening." There are also the categories "good and unchanged" and "bad and unchanged." During April, the economy moved from "good, but worsening" to "good and improving." Gonzalo Valdés, Deputy Director of the UNAB Institute of Public Policies, comments that the April results show that "the Chilean economy is regaining some of the dynamism lost in March, with a significant improvement in consumer conditions and some more favorable signals in the macroeconomic area. However, this progress is accompanied by a deterioration in expectations and inflationary pressures due to the conflict in the Middle East, which indicates a fragile recovery." Valdés also adds that "domestically, the government announced the National Reconstruction Law, which includes strong pro-investment measures. The economic recovery will depend both on the approval of the most important measures and on how the law is negotiated in Congress. The overall performance of the economy critically depends on the political system - and especially the opposition - providing signals that value economic growth as a driver of social improvement." Of the total variables considered in the index, 9 were in the "good and improving" category, 5 more than the previous month: inflation, real wages, mortgage interest rate, delinquent debtors, job creation, exports, IPSA, average consumer credit rate, and informality rate. Four variables are in the "good, but worsening" category, one more than in March: economic uncertainty, business confidence, consumer confidence, and employment rate. In the negative quadrant of "bad and worsening," the number of variables decreased from 7 to 1: current account balance and term deposits. "Bad, but improving" increased from 1 to 3 variables: the dollar, foreign direct investment, and the Index of Labor Notices on the Internet. The number of variables in the "unchanged" sector decreased from 9 to 7. "Good and unchanged" decreased from 9 to 5 variables, concentrating the government's net debt, copper price, labor participation, country risk, and female labor participation. "Bad and unchanged" went from having 0 variables to 2, which correspond to unemployment and the IMACEC index. Sub-index The expectations sub-index registered a negative monthly change in April, falling from 60.5 to 54.8 points, moving from "good and improving" to "good, but worsening." Within this sub-index, four quadrant changes were recorded, three of which were negative and one positive. The latter corresponds to the IPSA, which moved from "good, but worsening" to "good and improving." The negative changes were: economic uncertainty moved from "good and improving" to "good, but worsening"; business confidence moved from "good and unchanged" to "good, but worsening"; and consumer confidence moved from "good and improving" to "good, but worsening." The macroeconomic situation sub-index registered a significant increase in April, rising from 6.8 to 11.6 points. This brought the indicator back to the "good and improving" quadrant. Two variables moved to better quadrants. These are the exchange rate and foreign direct investment. Both moved from "bad and worsening" to "bad, but improving." The consumer situation sub-index also registered a significant increase, moving from "bad and worsening" to "bad, but improving"; the consumer credit rate and the index of labor notices moved from "bad and worsening" to "bad, but improving"; the mortgage interest rate, the informality rate, and delinquent debtors moved from "good and unchanged" to "good and improving"; and job creation moved from "bad and worsening" to "good and improving." The UNAB Institute of Public Policies warns that, given the uncertain international scenario due to geopolitical tensions, "the trajectory of gasoline prices will be especially relevant, as it can affect both inflation directly and the costs associated with transportation and production. Therefore, the evolution of economic perceptions, macroeconomic conditions, and household conditions will continue to be especially relevant in the coming months."