Chile: Strong Recovery After Devastating Earthquake

On February 27, 2010 Chile suffered an earthquake with magnitude of 8.8. The reconstruction costs were estimated in $30 billions. 

But the economy recovery began in the second quarter of 2010 after a short contraction; with the idea to reduce structural deficit , improving the financial system and productivity reforms to a long-term growth.

The public savings accumulated before the global crisis helped support an early recovery of economic activity. 

To achieve this goal, temporarily increase taxes, and carry out some additional borrowing. Also, Chile placed 10 year bonds with the worth of $1 billion and in "pesos chilenos" a debt with a worth of $500 million at a 5.5 % of interest rate in international financial markets.

Monetary policy is strong, as the market expects inflation to gradually decline to the target within the 24 month policy of the central bank.

The earthquake had a temporary impact on credit risk in the affected zones, as indicated in the financial stability report of the central bank. However, this effect is being offset by the economic activity and lower unemployment.

IMF agreed with the authorities that replacing the severance payment system with a more unemployment insurance scheme could help increase investment in education and on job training.

Questions:

1.- When the earthquake struck Chile, and what was its magnitude?

2.- How much the price of its reconstruction was estimated?