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Chile Economic Activity September 2021

Chile: Economic activity expands robustly in September

Economic activity increased 15.6% in year-on-year terms in September, which was a deterioration from August’s 19.1% increase. The figure marked the worst reading since April, but was notably above market expectations and nevertheless pointed to ongoing strong momentum. The weakening was due to a deterioration in the mining sector, while non-mining sector growth remained extremely robust.

On a monthly basis, economic activity grew 1.7% in seasonally-adjusted terms in September, which was above August’s 1.1% expansion. Meanwhile, annual average economic activity growth rose to 8.5% in September (August: +6.8%), signaling an improving trend. September’s reading suggests that the final Q3 GDP outturn will be very strong, with the economy underpinned by pension drawdowns, fiscal stimulus and looser Covid-19 restrictions.

Activity will likely lose steam in Q4 amid higher rates and political uncertainty, and as inflation bites into purchasing power. However, the possible approval of a fourth pension withdrawal bill—currently being studied by the Senate—is an upside risk.

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