GDP in Chile
Chile - GDP
The economy cools in Q3
According to comprehensive data released by the Central Bank, the economy grew 2.8% year-on-year in the third quarter, slowing from a revised 5.4% (previously reported: +5.3% year-on-year) increase in the second quarter. A contraction in mining activities, softer consumption dynamics and weaker external sector led the result. Although base effects were also at play given that Q3 had three fewer working days than last year, the reading also undershot market analysts’ expectations.
In part, the economy owed its downbeat performance to weaker domestic demand metrics than in the previous quarter (Q3: +4.6% yoy; Q2: +6.1% yoy; previously reported: +6.0% yoy). Household consumption logged 3.8% annually in Q3, down from a revised 4.4% increase (previously reported: 4.5% yoy), amid a softer labor market and higher inflation. On a more positive note, annual growth in fixed investment ticked up to a five-year high of 7.1% in Q3, from a revised 7.0% rise in Q2 (previously reported: +7.1% yoy). This was thanks to sustained machinery and equipment investment, and an uptick in the construction sector. Lastly, government consumption eased to 2.3% year-on-year, from a revised 3.5% in Q2 (previously reported: 2.8% yoy).
On the external side, a sharp drop in export gains (Q3: +1.7 yoy; Q2: +7.5% yoy) dented the net contribution of trade, mostly due to slower shipments of copper. Meanwhile, imports decelerated mildly on an annual basis to 8.4% from the previous quarter’s revised 11.2% increase (previously reported: +11.0%). Overall, the external sector subtracted 2.0 percentage points from GDP in Q3, down from a revised 0.8 percentage points negative contribution (previously reported: minus 0.7 percentage points) in Q2.
Looking at the industry-level performance, third-quarter slowdown was led by a marked contraction within the mining economy. Mining GDP sank 2.7% annually in Q3, from a revised 5.4% in the previous quarter (previously reported: +4.8%), amid lower production of copper-made products. In contrast, non-mining GDP grew at 3.2% (Q2: +5.5% yoy).
On a quarter-on-quarter basis, GDP fell a seasonally-adjusted 0.6%, below Q2’s 0.7% quarter-on-quarter rise.
Despite a softer Q3, the fundamentals of the Chilean economy appear healthy and the economy is expected to finish the year on strong footing. This is summarized by Diego W. Pereira and Lucila Barbeito, economists at J.P Morgan:
“The fact that fixed investment [...] and private sector consumption continued to expand on a sequential basis, albeit decelerating a tad, makes us comfortable in sticking to our baseline scenario: the incoming information, while somewhat weaker than expected, remains consistent overall with an ongoing broad-based economic expansion.”
The Central Bank sees GDP ending 2018 at 4.0% and at 3.5% in 2019. Met the why particular panelists, meanwhile, are slightly less optimistic and see growth of 3.4% in 2019, which is unchanged from last month forecast, and 3.0% in 2020.
Chile - GDP Data
|Economic Growth (GDP, annual variation in %)||4.0||1.8||2.3||1.3||1.5|
5 years of economic forecasts for more than 30 economic indicators.
Chile GDP Chart
Source: Chile Central Bank and Met the why particular calculations.
|Bond Yield||4.34||-0.44 %||Feb 21|
|Exchange Rate||654.5||0.05 %||Feb 21|
|Stock Market||27,456||-0.67 %||Feb 21|
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February 8, 2019
According to the National Statistical Institute (INE), consumer prices ticked up 0.1% month-on-month in January, after edging down 0.1% in December.
February 5, 2019
According to the IMACEC index, economic activity rose 2.6% year-on-year in December, decelerating from November’s 3.1%.
February 5, 2019
Copper prices hit a one-and-a-half year low at the start of the year and recovered somewhat by the end of January.
February 4, 2019
The Adimark GfK consumer confidence index (IPEC, Índice de Percepción de la Economía) rose to 47.0 points in January, from 44.6 points in December.
January 30, 2019
At its 30 January monetary policy meeting, the board of the Central Bank of Chile (BCCh) voted unanimously to hike the key policy rate from 2.75% to 3.00%.