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Chile Economic Activity April 2024

Chile: Economic activity expands year on year in April, but shrinks month on month

Economic activity expanded 3.5% compared to the same month of the previous year in April, which was above March’s 0.5% increase. Looking at the details of the release, the mining sector weakened in April, while the non-mining sector accelerated, led by a rebound in commercial activity. Overall economic activity growth was flattered by the fact that April 2024 had three more business days than April 2023.

On a monthly basis, economic activity dropped 0.3% in seasonally adjusted terms in April, a smaller decrease than March’s 0.6% fall and smaller than markets were expecting. Meanwhile, annual average economic activity growth rose to 1.0% in April (March: +0.7%).

Our Consensus is for GDP growth to slow in Q2 in quarter-on-quarter terms, after bumper growth in Q1, and April’s month-on-month fall in economic activity underpins this view.

On the outlook for 2024 as a whole, Itaú Unibanco analysts said:

“We expect lower average inflation, falling interest rates, and a positive external backdrop to support the recovery of economic activity this year. We have an upside bias to our 2.4% GDP call for 2024. Recovering mining will also play a key role behind the improvement from the 0.2% last year. With the output gap near closed and medium-term inflation expectations anchored to the 3% target, the central bank will continue to cut its policy rate.” 

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