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Chile Economic Activity March 2024

Chile: Economic activity growth eases in March

Economic activity rose 0.8% in year-on-year terms in March, which was a deterioration from February’s 4.5% increase. The reading was largely driven by softer growth in the mining sector and a contraction in the non-mining sector.

On a seasonally adjusted monthly basis, economic activity fell 0.7% in March (February: +0.9% mom), the worst result since July 2022 but largely in line with market forecasts.

The monthly economic activity data for January to March suggests that GDP expanded 2.0% in quarter-on-quarter terms in Q1, which would be a notable acceleration from Q4’s 0.1% growth. A large rebound in mining activity underpinned the reading. Beyond Q1, economic growth will normalize as mining is unlikely to continue expanding at such a sharp rate, though interest rate cuts will aid non-mining activity.

On the reading, Goldman Sachs’ Sergio Armella said:

“While the headline annual growth numbers were affected by calendar effects that should reverse in April when Chile will have three more workdays relative to 2023, the sequential numbers were weaker than we had anticipated. Growth in the quarter, however, was in line with the central bank’s forecast in the March IPoM (2.5% yoy).”

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