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Chile Economic Activity December 2023

Chile: Economic activity drops at sharpest pace since May in December

Economic activity decreased 1.0% compared to the same month of the previous year in December, which contrasted November’s 1.2% increase and market expectations of a rise. The outturn marked the worst reading since May. The reading was driven by deteriorations in the mining and non-mining sectors.

On a seasonally adjusted monthly basis, economic activity fell 1.1% in December (November: +0.4% mom), the worst result since July 2022. Meanwhile, the trend improved, with the annual average variation of economic activity coming in at minus 0.2% in December, up from November’s minus 0.3%.

Taken together, the monthly economic activity data suggests that the economy expanded just 0.1% quarter on quarter in Q4, which if confirmed would be slightly below our panelists’ projections. Momentum should pick up in 2024 however, as the Central Bank continues to slash interest rates.

On the 2024 outlook, Itaú Unibanco analysts said:

“Lower interest rates and inflation will support a gradual sequential recovery in economic activity, but downbeat private sentiment, softening employment indicators will likely lead to a below-potential 1.7% growth in 2024.”

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