Covid 19 has brought to the world, to the Latin American region and, in this particular case, to Chile, the worst pandemic our generation has ever witnessed and experienced. The latest data provided by Johns Hopkins University at the beginning of this week show that the planet has already exceeded one million deaths caused by the virus and more than 33 million infections globally, of which about 50% alone was reported in the American continent according to the latest reports from the World Health Organization (WHO).

The reality Latin America is currently experiencing is, to say the least, difficult and complex. Because the health crisis and the mobility restrictions imposed by most governments in the region are compounded by the deterioration of the economic scenario. This has been the case of Chile, acknowledged as the most stable and prosperous economy in the region but which, since March of this year and for around seven months, had to implement an unprecedented quarantine in practically the entire national territory.

And if to the above we add the social outbreak that occurred on October 18, 2019 – which triggered the scheduling of a plebiscite to be held on October 25 this year to approve or reject the creation of a new Constitutional Charter-, which produced temporary effects on the activity economic and social of the country, we see ourselves before an explosive cocktail whereby the appearance of Covid 19 further aggravated the scenario: Drop in Gross Domestic Product and trade exchange; sharp decline in the economic activity indicators, trade and tourism in standstill, zero operation of international commercial flights and job loss, among many others.

The country, which until the beginning of this year witnessed a low single-digit unemployment rate, quickly moved to double digits in the April-June 2020 quarter, to 12.2%. This represents the highest rate in a decade.

Under this complex scenario, it is worth mentioning the measures implemented by the Government to mitigate the economic effects of the pandemic and the drop in employment. This represents an additional budget of USD 12,000 million to face this crisis, start the recovery of economic activity and develop programs – which are already in full swing – for the promotion and protection of employment – with an important focus on the employability of women -, subsidies to the middle class and Government credits at zero interest rate.

That is why the arrival of Spring has brought better news and a green sprout of hope to the country.

The indicators of the pandemic show a positivity rate below 6%, and 97% of the Metropolitan Region – Santiago and its surroundings represent approximately half of the national population – is under phase 2 (Transition) and 3 (In preparation), thus allowing greater mobility for people and transportation, reopening of trade, planned return to workplaces, interregional trips under certain conditions, requests for the reopening of classes in schools, technical and higher educational establishments, new possibilities for international flights, interest rates for commercial loans at minimum rates and, something very important for the public perception and the real expectations of recovery, an unexpected but favourable trend as regards employment.

In the June-August quarter, the unemployment rate reached 12.9%, according to the report delivered on Wednesday, September 30 by the National Institute of Statistics (INE). Although the accumulated figure remains high compared to the last report and points to more than one million unemployed, the truth is that these data represent the first quarterly drop since November 2019 and is below the expectations of market analysts, around 13.6% (Source: Bloomberg).

The summer season will probably allow the country to stay on this path and, potentially, improve its health indicators, and therefore its economic indicators too. However, we must also take into account that this normality is not what we are accustomed to; As long as the pandemic is there and the vaccine(s) being developed are not officially authorized for use, we will continue to lag behind as regards the recovery of our production and activity and faced with uncertainties and scenarios not entirely controllable.

Therefore, a healthy scenario of certain stability fostering a favourable environment for the development of economic and productive activities will continue to depend, to a large extent, on the measures to be maintained by the Government and the health authorities to contain a re-outbreak of infections. And we should add to this the awareness of people as regards maintaining responsible self-care and isolation behaviours without relaxation to prevent new infections, thereby improving mobility and ensuring a safe return to work.

We just have to look at Europe, which after the summer holidays experienced serious risks of a re-outbreak of the pandemic and where the countries most affected are considering again the possibility of imposing lockdowns.

Enjoy this Spring.