Chile: Economy gains momentum in Q3
November 18, 2013
In the third quarter, GDP expanded 4.7% over the same quarter last year, which was up from the 4.1% expansion recorded in the second quarter. The figure overshot the 4.4% increase the market had expected and marked the fastest growth rate since Q4 2012.
The quarterly reading mainly reflected an improvement in external demand, while domestic demand slowed from a 4.1% expansion in Q2 to a 1.3% rise in Q3. Private consumption increased 5.3% over the same quarter last year (Q2: +6.5% year-on-year) and government consumption accelerated from a 3.7% expansion in Q2 to a 4.9% increase in Q3. Growth in fixed investment moderated to 3.2% in Q3, which was significantly lower than the 8.6% expansion seen in Q2.
On the external side of the economy, exports of goods and services expanded 13.1% in the third quarter, which was up from the 7.0% expansion recorded in the second quarter. On the other hand, imports decelerated from a 7.0% increase in the second quarter to a 2.9% rise in the third quarter. As a result, the external sector's net contribution to overall economic growth rebounded from minus 0.3 percentage points in Q2 to plus 3.2 percentage points in Q3.
On a quarterly basis, the economy expanded 1.3% in seasonally-adjusted figures, which marked an improvement over the 0.5% expansion recorded in the second quarter.
In the latest Monetary Policy Report from September, the Central Bank stated that it expects economic growth to range between 4.0% and 4.5% both this year and next. LatinFocus Consensus Forecast panelists see economic activity growing 5.0% this year, which is up 0.2 percentage points from last month's forecast. For 2014, the panel expects the economy to expand 4.8%, which is down 0.1 percentage points from last month's estimate.
Author: Dirina Mançellari, Senior Economist