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Chile: Economic growth speeds up in Q1 on the back of consumption

May 19, 2015

In the first quarter, the economy grew 2.4% over the same period last year, which was an improvement over the 1.8% increase observed in Q4 2014. In addition, the figure marked the fastest expansion in a year and overshot the 2.2% increase the market had expected. The acceleration reflected an improvement in domestic demand, while the external sector performed worse compared to the previous quarter.

Private consumption rose 1.6% in Q1, coming in above the 1.0% increase recorded in Q4. In addition, growth in government spending picked up slightly from 5.5% in Q4 to 5.6% in Q1, marking the largest gain in a year. Conversely, fixed investment swung from a 0.5% increase in Q4 to a 1.7% contraction in Q1.

On the external side of the economy, exports of goods and services slowed from a 1.7% expansion in the fourth quarter to a 1.4% increase in the first quarter. In addition, imports contracted 2.0% over the same quarter of the previous year, which was an improvement over the steeper 3.9% decrease seen in Q4. As a result, the external sector’s net contribution to overall economic growth fell from 2.2 percentage points in the fourth quarter to 1.3 percentage points in the first quarter, marking the lowest contribution since Q2 2013.

On a quarterly basis, the economy accelerated form a 0.8% increase in the fourth quarter to a 1.0% expansion in the first quarter.

The Central Bank expects GDP to grow between 2.5% and 3.5% this year. LatinFocus Consensus Forecast panelists see the economy growing 2.9% in 2015, which is unchanged from last month’s forecast. For 2016, the panel expects the economy to pick up the pace and expand 3.6%.


Author: Teresa Kersting, Economist

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Chile GDP Q1 2015 0

Note: Year-on-year changes of GDP in %.
Source: Chile Central Bank (BCC) and LatinFocus Consensus Forecast.


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