Chile: Economy grows at slowest pace in almost four years in Q4, decelerates in 2013
March 18, 2014
In the last quarter of 2013, the economy grew 2.7% over the same period of the previous year, which was just over half of the 5.0% expansion observed in the third quarter. The figure fell slightly short of the 2.8% expansion the market had expected and marked the slowest rise since Q1 2010. In the full year 2013, the economy grew 4.1%, which was down in from the 5.4% increase recorded in 2012 The quarterly reading reflected a slowdown in both domestic and external demand. Private consumption rose 4.9% in Q4 (Q3: +5.4% year-on-year) and recorded the slowest increase since Q4 2009. In addition, government consumption decelerated from a 5.6% rise in Q3 to a 3.1% increase in Q4. Fixed investment plummeted 12.3% and recorded the fastest fall since Q3 2009 (Q3: -1.5% yoy). On the external side of the economy, exports of goods and services swung from an 11.3% increase in Q3 to a 0.9% fall in Q4. In addition, imports decreased 5.3% (Q3: +0.5% yoy). As a result, the external sector's net contribution to overall economic growth fell from 3.7 percentage points in the third quarter to 2.0 percentage points in the fourth quarter. On a quarterly basis, the economy contracted 0.1% in seasonally-adjusted terms, which marked a deterioration over the 1.6% expansion recorded in the third quarter. The Central Bank expects the economy to grow within a range of 3.75% to 4.75% in 2014. LatinFocus Consensus Forecast panelists see the economy growing 3.7% in 2014, which is down 0.3 percentage points from last month's forecast. For 2015, the panel expects the economy to expand 4.2%.
Author: Dirina Mançellari, Senior Economist