Chile GDP Grows 2.8% YoY in Q3, Lowest in a Year

The economy of Chile advanced 2.8 percent year-on-year in the third quarter of 2018, slower than an upwardly revised 5.4 percent expansion in the previous period which was the strongest increase since 2012. Figures came slightly below market expectations of a 2.9 percent advance, pointing to the slowest growth since the third quarter of 2017. Household consumption, government spending and exports increased at a softer pace. Among economic activities, weaker growth was widespread, and the mining sector contracted.

Year-on-year, both household consumption (3.8 percent vs 4.4 percent in Q2) and government spending (2.3 percent vs 3.5 percent) rose less. In contrast, fixed investment grew slightly faster (7.1 percent vs 7.0 percent), boosted by investment in machinery and equipment (11.8 percent vs 12.5 percent) and investment in construction (4.4 percent vs 3.8 percent). Also, net external demand contributed negatively to growth, as imports jumped 8.4 percent (vs 10.2 percent in Q2), amid higher purchases of metallic products, machinery and equipment; fuels and chemicals. At the same time, exports advanced at a softer clip (1.7 percent vs 7.5 percent in Q2), led by sales of food and fruits.

On the production side, output growth slowed in: internal trade (3.2 percent vs 8.4 percent in Q2); restaurants & hotels (1.8 percent vs 3.8 percent); transport (2.7 percent vs 4.9 percent); communication and information services (2.5 percent vs 3.8 percent); financial services (3.9 percent vs 4.8 percent); business services (3.0 percent vs 4.2 percent) and personal services (4.0 percent vs 4.3 percent). Also, the manufacturing sector expanded less (0.6 percent vs 7.7 percent), amid slowdowns in production of food (0.3 percent vs 9.1 percent), wood and furniture (0.6 percent vs 6.3 percent); non-metallic and basic metallic minerals (1.8 percent vs 6.5 percent). Meantime, weaker growth was recorded in construction (4.1 percent vs 4.6 percent); utilities (1.2 percent vs 5.0 percent); agriculture (7.5 percent vs 10.2 percent) and fishing (2.3 percent vs 11.2 percent). In addition, mining contracted (-2.7 percent vs 5.4 percent), led by declines in copper (-2.6 percent vs 5.4 percent) and other mining (-3.3 percent vs 4.6 percent). On the other hand, real estate activities continued to advance solidly (3.8 percent vs 3.4 percent).

On a seasonally adjusted quarterly basis, the Chilean GDP expanded 0.3 percent, compared to a 0.7 percent rise in the second quarter of 2018 and below market expectations of 0.4 percent. It is the weakest quarterly expansion since a 0.6 percent contraction in Q1 2017.

Chile GDP Grows 2.8% YoY in Q3, Lowest in a Year

Banco Central de Chile | Luisa Carvalho |
11/19/2018 2:12:26 PM