GDP in Chile
Chile - GDP
Growth slows to near two-year low in Q1
Growth decelerated to 1.6% year-on-year in the first quarter, more than half Q4 2018’s 3.6% and marking the slowest acceleration since Q2 2017. A sharp drop in mining activity led the weaker first quarter performance, which had been largely anticipated by analysts.
Domestic activity lost stride in the first quarter. Notably, despite upbeat business confidence, fixed investment growth nearly halved amid slower expenditure in machinery and equipment (Q1: +2.9% year-on-year; Q4 2018: +5.6% yoy), surprising analysts who had expected it to underpin the quarterly expansion. In addition, household spending moderated amid slow gains in employment and lower consumer sentiment (Q1: +3.2% yoy; Q4 2018: +3.6% yoy). Meanwhile, government spending rose 1.7% in Q1, accelerating from Q4’s 1.3% expansion.
On the external front, exports contracted in Q1 on falling copper shipments and logged the weakest print in seven quarters (Q1: -1.8% yoy; Q4 2018: +3.3% yoy). On the other hand, import growth decelerated from 6.6% in Q4 to 2.3% in Q1, cushioning the external sector’s downturn somewhat.
Looking at the industry-level performance, the first-quarter slowdown was driven by slump in the mining economy. Mining GDP contracted 3.6% annually in Q1, following a 1.3% expansion in the previous quarter, amid adverse weather conditions in February. In addition, non-mining GDP growth slowed to 2.2%, from 3.7% in Q4 2018.
On a quarter-on-quarter basis, GDP recorded null growth in the first quarter, down from Q4’s 1.3% upturn.
The Central Bank sees GDP expanding between 3.0% and 4.0% this year and between 3.0% and 4.0% in 2020. FocusEconomics panelists, meanwhile, are slightly less optimistic and project growth of 3.3% in 2019, which is unchanged from last month forecast, and 3.1% in 2020.
Chile - GDP Data
|Economic Growth (GDP, annual variation in %)||4.0||1.8||2.3||1.3||1.5|
5 years of economic forecasts for more than 30 economic indicators.
Chile GDP Chart
Source: Chile Central Bank and FocusEconomics calculations.
|Bond Yield||3.33||-0.44 %||Jun 20|
|Exchange Rate||683.9||0.05 %||Jun 20|
|Stock Market||25,711||-0.67 %||Jun 20|
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June 7, 2019
At its 7 June monetary policy meeting, the board of the Central Bank of Chile (BCCh) voted unanimously to cut the key policy rate by 50 basis points to 2.50%, marking the sharpest reduction in a decade, amid softer-than-expected inflation and lackluster growth in the first quarter.
June 7, 2019
Consumer prices rose 0.6% month-on-month in May (April: 0.3%), the fastest monthly increase in almost two years.
June 6, 2019
The Adimark GfK consumer confidence index declined to 40.7 points in May, from 43.2 points in April, marking the lowest reading since May 2017.
June 5, 2019
In April, the IMACEC index gathered momentum for a second consecutive month, after February recorded the weakest expansion in almost two years.
June 4, 2019
The business confidence index (IMCE), published by ICARE and the Adolfo Ibáñez University, deteriorated for the fourth consecutive month in May, landing at 50.6 points (April: 52.1 points).