Chile: Economy slows in the third quarter amid slower export growth
November 18, 2011
In the third quarter, GDP expanded 4.8% over the same quarter last year. The figure was below the revised 6.6% expansion recorded in the second quarter (previously reported: +6.8% year-on-year) but matched market expectations. Total consumption decelerated from an 8.4% increase in Q2 to a 6.5% expansion in Q3, owing to weaker private consumption. Meanwhile, gross fixed investment doubled from a 10.7% increase in the second quarter to a 21.6% expansion in the third. Despite the deceleration, domestic demand remained strong, expanding 9.4%. Meanwhile, the external sector's net contribution to overall growth deteriorated notably as copper exports slipped in the third quarter. Exports of goods and services decelerated from a 10.8% annual increase in the second quarter to a 3.9% expansion in Q3. In contrast, imports remained virtually unchanged, expanding 13.8% in the third quarter (Q2: +13.9% year-on-year). As a result, the external sector's net contribution to overall economic growth deteriorated from minus 3.6 percentage points in the second quarter to minus 6.5 percentage points in the third. A quarter-on-quarter comparison corroborates the deceleration suggested by the annual figures. According to seasonally adjusted figures, the economy expanded 0.65% over the previous quarter, below the 1.30% expansion registered in Q2. The Central Bank expects economic growth to range between 6.25% and 6.75% this year, and to moderate to 4.25%-5.25% in 2012.