Chile: Economic activity deteriorates in March, but outturn over Q1 as a whole is robust
Economic activity dropped 2.1% in year-on-year terms in March, which was a deterioration from February’s 0.5% decrease. March’s reading was mainly due to a large deterioration in the mining sector, which recorded the sharpest contraction since April 2022. In addition, non-mining output shrank at a faster pace.
On a monthly basis, economic activity dropped 0.1% in seasonally adjusted terms in March, moderating from February’s 0.4% fall but above market expectations.
As a result, the monthly economic activity data suggests that in Q1 as a whole GDP rose 1.0% quarter on quarter and declined only marginally year on year despite the challenging base effect. This shows the economy’s resilience in the face of high inflation and interest rates, which will likely keep the Central Bank on hold for longer than previously anticipated.