Chile: Chilean economy accelerates slightly in Q3 as stronger domestic economy more than compensates for weak external sector
November 18, 2015
Chile’s GDP picked up in Q3 as improving consumption and investment more than compensated for a deterioration in the external sector. Annual economic growth accelerated from Q2’s 1.9% to 2.2% in Q3, slightly exceeding market expectations of a 2.1% expansion.
Private consumption rose 1.8% in Q3, coming in above the 1.5% increase recorded in Q2. In addition, growth in government spending accelerated from 4.0% in Q2 to 5.9% in Q3, marking the fastest expansion in a year and a half. Fixed investment rebounded from a 3.3% contraction in Q2 and recorded the largest gain since Q2 2013, increasing an annual 7.1% in Q3.
On the external side of the economy, exports of goods and services advanced slightly from Q2’s notable 5.5% contraction to a softer 0.9% decrease in Q3. At the same time, imports turned around from Q2’s 5.4% fall to a 3.1% expansion. As imports grew at a faster pace than exports, the external sector’s net contribution to overall economic growth deteriorated from zero percentage points in Q2 to minus 1.5 percentage points in Q3, the worst reading since Q1 2013.
On a quarterly basis, the economy improved from a 0.1% contraction in the second quarter to a 0.4% increase in the third quarter.