Chile: Economy slows more-than-expected in first quarter
May 20, 2013
In the first quarter, GDP expanded 4.1% over the same quarter last year. The figure undershot market expectations that had the economy growing 4.5% and marks the slowest rise recorded since Q3 2011. The weaker-than-expected reading was due to lower growth in almost all GDP components.
Total consumption slowed from a 7.3% expansion in Q4 2012 to a 5.5% rise in Q1, owing mostly to a sharp deceleration in government consumption (Q4: +7.2% year-on-year; Q1: +0.9% yoy). In addition, growth in fixed investment moderated to 9.6% in Q1, which came in well below the robust 18.1% increase seen in the fourth quarter.
Meanwhile, exports of goods and services expanded 1.0% in the first quarter, which was well below the 4.7% increase seen in Q4. Imports also slowed in the first quarter to a 8.2% rise (Q4: +11.9% yoy). As a result, the external sector's net contribution to overall economic growth improved slightly, stepping up from minus 3.1 percentage points in Q4 to minus 3.0 percentage points in Q1.
In its latest Monetary Policy Report from March, the Central Bank sees economic growth ranging between 4.5% and 5.5% in 2013 above the 4.25% - 5.25% range forecasted in December's report. LatinFocus Consensus Forecast panellists share this view and 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%.