Chile: Economic activity loses steam in July
Economic activity increased 3.3% year-on-year in July, according to the IMACEC monthly economic activity index published by the Central Bank of Chile. The result represented a marked deceleration from June’s 4.9% print and marked the lowest reading so far this year. Nevertheless, it came in line with analysts’ expectations of a 3.0%–4.0% increase.
The slowdown was driven by a poor mining-sector performance: The mining index fell 2.3% in July (June: +3.7% year-on-year) amid an ongoing slump in copper prices. On a more positive note, non-mining activity rose 3.8% in the month on the back of the country’s robust services sector. All in all, on the heels of an exceptionally strong first half of the year, July’s result signals likely headwinds to growth in the third quarter amid early signs of possible external demand softening and painfully slow recovery in the labor market.
In seasonally-adjusted terms, economic activity rose 0.2% month-on-month in July, from a flat reading in June (previously reported: -0.1% month-on-month). Meanwhile annual average economic activity growth remained stable from a month earlier at an over four year high of 3.9% in July.