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Chile annual GDP growth beats estimates at 1.6%

Staff Writer | November 21, 2016
The Chilean economy advanced 1.6 percent year-on-year in the third quarter of 2016, the same as an upwardly revised 1.6 percent expansion in the previous period and better than market expectations of 1.4 percent.
Chilean economy
LatAm   External trade contributed positively to Chile
Household spending accelerated while investment contracted for the first time this year. External trade also contributed positively to growth as imports shrank.

Year-on-year, household spending increased at a faster 2 percent (1.8 percent in the previous period) while government consumption eased slightly (6.9 percent compared to 7.5 percent in the previous period).

Gross fixed capital formation shrank 1.2 percent, compared to a 3 percent gain in the previous period as investment in construction declined 1.8 percent and machinery and equipment fell 0.7 percent.

Exports rose at a slower 0.5 percent (0.9 percent in the previous period) and imports fell 1.4 percent (0.2 percent in the previous period).

On the production side, internal trade increased 3.1 percent; transport rose 5 percent and business services edged up 0.1 percent. Agriculture rose 0.7 percent, boosted by production of fresh vegetables.

In contrast, mining shrank 0.8 percent, marking the fifth straight quarter of decline. Copper output which accounts for 15 percent of the GDP declined 0.5 percent and remaining extraction fell 3.5 percent, namely gold and silver while iron and coal increased.

Manufacturing went down 1.4 percent, mainly due to lower production of drinks/wine and tobacco. In addition, construction shrank 1.4 percent and utilities fell 3.7 percent.

On a quarterly basis, the economy advanced 0.6 percent, recovering from a 0.4 percent contraction in the previous period and in line with expectations as mining and manufacturing bounced back.