Chile Annual GDP Growth Lowest Since 2009 In Q1

The Chilean economy advanced 0.1 percent year-on-year in the first quarter of 2017, easing from a 0.5 percent expansion in the previous period and slightly below market expectations of 0.2 percent. It is the lowest growth rate since the 2009 recession as private consumption slowed and exports shrank further after a six-week strike at the world's biggest copper mine caused a 14.4 percent slump in copper production.

Year-on-year, household expenditure increased at a slightly slower pace (2 percent vs 2.4 percent in Q4) and external trade contributed negatively to growth as exports continued to decrease (-4.9 percent vs -2 percent in Q4) while imports surged (4.2 percent from a flat reading in Q4). On the positive side, government spending rose faster (5.1 percent vs 1.7 percent in Q4) and fixed investment contracted less (-2.4 percent vs - 5 percent in Q4). 

On the production side, growth eased for transport (0.4 percent vs 2 percent in Q4); financial services (2.5 percent vs 2.9 percent in Q4); real estate activities (1.8 percent vs 2.1 percent in Q4) and public administration (1.5 percent vs 2.5 percent in Q4). Business services decreased (-3.6 percent vs -3.5 percent in Q4) and mining sector fell sharply (-13.8 percent vs -3.3 percent in Q4), dragged down by reduced copper production (-14.4 percent vs -3 percent in Q4) hit by the prolonged strike at the world's largest copper mine Escondida. Construction slipped (-2.2 percent vs -0.2 percent in Q4) and utilities declined (-0.5 percent vs -7.6 percent in Q4).In contrast, output advanced for internal trade (5.5 percent vs 3 percent in Q4); communication (2.7 percent vs 1.7 percent in Q4) and personal services (4.3 percent vs 3 percent). Also, manufacturing rebounded (0.9 percent vs -2.2 percent in Q4), boosted by food (4 percent vs -1.7 percent in Q4), textiles ,clothing and footwear (13 percent vs 10.3 percent in Q4) and metal products, machinery and equipment (6.4 percent vs 1.9 percent). In addition, fisheries rose significantly (34 percent vs 1.6 percent in Q4).

On a quarterly basis, the GDP increased 0.2 percent compared to a downwardly revised 0.3 percent drop in the previous three months.

Banco Central de Chile | Luisa Carvalho |
5/18/2017 2:14:33 PM