Chile: Economy remains resilient on strong domestic demand
March 18, 2013
In the fourth quarter, GDP expanded 5.7% over the same quarter a year ago. The figure virtually matched both the revised 5.8% expansion recorded in the third quarter (previously reported: +5.7% year-on-year), and market expectations of a 5.6% rise. The stronger-than-expected growth figure came on the back of buoyant domestic demand, which compensated for a weaker external sector amid dampening global demand.
Total consumption accelerated from a 5.4% increase in Q3 to a 7.3% expansion in Q4, owing to stronger private consumption (Q3: +6.0% yoy, Q4: +7.3% yoy). In addition, gross fixed investment expanded a robust 18.1% in the fourth quarter, which was well above the 13.4% expansion tallied in Q3.
Meanwhile, exports of goods and services expanded 4.7% in the fourth quarter, contrasting the 4.3% contraction seen in Q3. However, imports accelerated even more markedly, rising 11.9% in the fourth quarter (Q3: +2.3% yoy). As a result, the external sector's net contribution to overall economic growth deteriorated from minus 2.7 percentage points in Q3 to minus 3.1 percentage points in Q4.
A quarter-on-quarter comparison corroborates the strong momentum suggested by the annual figures. According to seasonally adjusted figures, the economy expanded 1.5% in the fourth quarter, which was above the 1.2% increase recorded in Q3.
In the full year 2012, GDP expanded 5.6%, which was below the 5.9% increase recorded in 2011. In the latest Monetary Policy Report from December, the Central Bank sees economic growth ranging between 4.25% and 5.25% in 2013. 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%.