Chile: Economic activity records quickest growth since May 2022 in February
Economic activity increased 4.5% compared to the same month a year earlier in February, which was above January’s 2.3% increase and triple market expectations. February’s print marked the best reading since May 2022. The notable upturn came on the back of faster expansions in the mining and non-mining sectors.
On a seasonally adjusted monthly basis, economic activity rose at a more moderate pace of 0.8% in February (January: +2.0% mom). Meanwhile, the trend improved, with the annual average growth of economic activity coming in at 0.6%, up from January’s 0.3% reading.
Taken together, the data for January and February is in line with our panelists’ forecasts for an acceleration in economic activity in Q1. That said, our current Consensus likely underestimates the degree of the acceleration in light of strong February data, and as such panelists’ Q1 GDP forecasts are likely to be revised upwards in the coming weeks.
On the outlook, Itaú Unibanco analysts said:
“The activity rebound this year will be lifted by private consumption given lower inflation and interest rates, while mining dynamics seem set to improve. Despite falling interest rates, investment is likely to remain weak. The strong fiscal expenditure pull at the start of the year will likely need to be reeled in during the latter part of 2024 in order to meet fiscal targets. Overall, the economy will grow above our current 1.7% call.”