Chile’s GDP slightly rises in Q4, beats annual forecast

By Thomson Reuters Mar 18, 2024 | 7:22 AM

(Reuters) – Chile’s economy experienced a slight expansion of 0.1% in the fourth quarter of 2023 compared to the previous quarter, according to data released by the country’s central bank on Monday, a figure slightly below market consensus.

The Gross Domestic Product (GDP) of Chile, the world’s most prolific copper producer, also witnessed a 0.4% year-on-year increase, surpassing the median forecast of a 0.2% rise.

The quarter-on-quarter GDP growth was driven by improvements in personal services and transportation sectors. Conversely, a decline in mining activities partially offset the annual growth, the central bank reported.

For the entire year of 2023, Chile’s economy recorded a 0.2% expansion from the previous year. The central bank primarily attributed this GDP growth to positive contributions from personal services, EGA, and transportation. In contrast, the trade sector posed a significant downward impact on the 2023 GDP.

In December 2023, the Chilean central bank had revised its forecast, predicting the country’s GDP to remain flat for the year, a modification from its earlier prediction of a contraction of 0.5% to zero growth.

In a bid to stimulate the economy, the central bank initiated a cycle of monetary easing in July 2023, with a larger-than-expected rate cut of 100 basis points. Subsequently, in January, the bank cut another 100 basis points, reducing the rate to 7.25%, indicating its perception of decreasing inflationary pressures.

(Reporting by Natalia Ramos and Natalia Siniawski; Editing by Toby Chopra)