Chile: Growth accelerates in Q4 2018
March 18, 2019
According to comprehensive data released by the Central Bank, the economy grew 3.6% year-on-year in the fourth quarter, accelerating from a revised 2.6% increase in the third quarter (previously reported: +2.8% yoy). Notably, a rebound in mining activities fueled growth through the quarter. In annual terms, the economy expanded 4.0% in 2018, matching analysts’ expectations and substantially above 2017’s 1.3% upturn.
Despite the stronger headline reading, growth in domestic demand was only marginally above the previous quarter (Q4: +4.5% yoy; Q3: +4.4% yoy; previously reported: +4.6% yoy). Notably, fixed investment led the uptick, increasing 5.6% in Q4, from a downwardly revised 4.9% in the quarter prior (previously reported: +7.1% yoy). Increased investment in machinery and equipment led the expansion. On the other hand, household spending lost its stride, decelerating from a revised 4.1% in Q3 (previously reported: +3.8% yoy), to 3.6% in the last quarter of 2018. Lastly, government spending logged 1.3% in Q4, slowing from Q3’s revised 1.9% (previously reported: +2.3% yoy).
On the external front, exports gathered momentum in Q4, increasing 3.3% from a revised 1.3% a quarter prior (previously reported: +1.7% yoy). In contrast, imports decelerated to 6.6% on an annual basis, after the revised 8.0% acceleration in Q3 (previously reported: +8.4% yoy).
Looking at the industry-level performance, the fourth-quarter upturn was supported by a rebound within the mining economy. Mining GDP rose 1.3% annually in Q4, following a revised 1.9% contraction in the previous quarter (previously reported: -2.7% yoy), amid higher copper output. In addition, non-mining GDP climbed 3.7%, from a revised 2.9% increase in Q3 (previously reported: +3.2% yoy).
On a quarter-on-quarter basis, GDP rose a seasonally adjusted 1.3%, up from Q3’s 0.2% quarter-on-quarter rise.
Author: Nicolás J. Aguilar, Economist