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Chile: Economy accelerates in Q4 2014, posts weakest growth in five years in 2014

March 18, 2015

In the fourth quarter, the economy grew 1.8% over the same period of the previous year, which was an improvement over the revised 1.0% increase observed in the third quarter (previously reported: +0.8% year-on-year). In addition, the figure slightly undershot the 1.9% increase the market had expected. The quarterly reading reflected an improvement in domestic demand while the external sector performed worse compared to the previous quarter. In the full year 2014, the economy grew 1.9%, which was well below 2013’s 4.2% increase and marked the slowest expansion in five years.

Growth in government spending accelerated from 2.3% in Q3 to 5.5% in Q4. In addition, fixed investment rebounded from a 12.1% drop in Q3 to a 0.5% increase in Q4. However, private consumption rose 1.0% in Q4, which was a below the 1.9% increase recorded in Q3, and marked the slowest increase since Q3 2009.

On the external side of the economy, exports of goods and services rebounded from a 2.6% contraction in the third quarter to a 1.7% expansion in the fourth quarter. In addition, imports contracted 3.9% over the same quarter of the previous year, which was an improvement over the 9.8% decrease seen in the previous quarter. As a result, the external sector’s net contribution to overall economic growth fell from 3.4 percentage points in the third quarter to 2.2 percentage points in the fourth quarter.

On a quarterly basis, the economy accelerated form a 0.4% increase in the third quarter to a 0.9% expansion in the fourth quarter.

The Central Bank expects GDP to grow between 2.5% and 3.5% this year. LatinFocus Consensus Forecast panelists see the economy growing 2.8% in 2015, which is up 0.1 percentage points from last month’s forecast. For 2016, the panel expects the economy to pick up the pace and expand 3.5%.


Author:, Senior Economist

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Chile GDP Q4 2014 0

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


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