Chile Q1 GDP Growth Weakest in Nearly 2 Years

The economy of Chile advanced 1.6 percent year-on-year in the first quarter of 2019, easing from a 3.6 percent expansion in the previous period and missing market expectations of 1.8 percent. It was the weakest growth rate since the second quarter of 2017, as mining; fishing and agricultural activity shrank.

Year-on-year, both household consumption (3.2 percent from 3.6 percent in Q4) and fixed investment slowed (2.9 percent from 5.6 percent), of which investment in machinery and equipment (3.3 prcent from 12.1 percent). On the other hand, government spending increased 1.7 percent, faster than a 1.3 percent rise in the prior period. Net external demand contributed negatively to growth, as exports dropped 1.8 percent (vs 3.3 percent in Q4), mostly due to refined copper, other minerals and fruits while imports went up 2.3 percent (vs 6.6 percent in Q4), driven by iron and steel and petroleum.

On the production side, mining activity contracted 3.6 percent, after grewing 1.3 percent in the last quarter of 2018, mainly due to copper production (-2.7 percent from 1.9 percent). Also agriculture (-1.2 percent from 5.7 percent); fishing (-3.1 percent from 13.9 percent); and utilities (-0.6 percent from 4.2 percent) shrank. Additionally, slower growth was recorded in manufacturing  (0.9 percent from 3.6 percent), mainly due to food (0.5 percent from 5.6 percent), wood and furniture (-2.3 percent from 0.5 percent), and textiles, clothing, leather and footwear (-8.8 percent from -4.8 percent); construction (2.8 percent from 3.1 percent); internal trade (2.6 percent from 3.8 percent); restaurants & hotels (1.3 percent from 2.4 percent); transport (4.2 percent from 5.1 percent); communication and information (2.6 percent from 3.9 percent); financial services (5.8 percent from 6.0 percent); real estate (3.2 percent from 3.3 percent); and personal services (3.3 percent from 3.9 percent). Meanwhile, business (3.1 percent from 2.9 percent) and utilities (4.2 percent from 2.7 percent) advanced further. 

On a seasonally adjusted quarterly basis, the economy showed no growth, after expanding 1.3 percent in the prior quarter.

Chile Q1 GDP Growth Weakest in Nearly 2 Years

Banco Central de Chile | Stefanie Moya |
5/20/2019 1:16:31 PM