Chile: Economy strengthens in Q4 on stronger external sector
March 19, 2012
In the fourth quarter, GDP expanded 4.5% over the same quarter the previous year. The figure was above the revised 3.7% expansion recorded in the third quarter (previously reported: +4.8% year-on-year) and exceeded market expectations, which had GDP expanding a softer 4.2%. In the full year 2011, GDP expanded a strong 6.0%, virtually unchanged from the revised 6.1% expansion recorded in 2010 (previously reported: +5.2%). GDP figures were strongly revised as a result of a change in the base year of calculation. Total consumption decelerated from a 6.2% increase in Q3 to a 5.6% expansion in Q4, owing to somewhat weaker private consumption. Meanwhile, gross fixed investment rose 16.3% in the fourth quarter, down from the 17.1% increase in the third. As a result, domestic demand expanded 5.5%, below the 8.6% increase in the previous quarter. Meanwhile, the external sector's net contribution to overall growth improved notably as exports rebounded in the fourth quarter. Exports of goods and services swung from a 0.7% annual contraction in the third quarter to a 4.9% expansion in Q4. In contrast, imports moderated, expanding 7.2% in the fourth quarter (Q3: +13.0% year-on-year). As a result, the external sector's net contribution to overall economic growth improved notably from minus 5.3 percentage points in the third quarter to minus 0.8 percentage points in the fourth. A quarter-on-quarter comparison corroborates the acceleration suggested by the annual figures. According to seasonally adjusted figures, the economy expanded 2.0% over the previous quarter, which was well above the 0.3% increase in Q3.