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Chile GDP falls more sharply than expected in Q4

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Staff Writer | March 21, 2017
Chile industry
LatAm   GDP in Chile shrank at a 0.4%

Chile's economy fell into a funk at the end of 2016 as investment plummeted, with weakness set to spill over into 2017.

Gross domestic product in Chile shrank at a 0.4% quarter-on-quarter pace in the last three months of 2016.

That was twice the drop economists had forecast and followed a quarterly pace of expasion of 0.9% over the previous three months.

Year-on-year, growth slowed from 1.8% in the third quarter to 0.5% in the fourth, as expected.

Domestic demand was hardest hit, falling back at a quarterly pace of 1.0% and undoing the prior quarter's growth, as gross fixed capital formation pluned 5.6% after rising just 0.5% in the previous quarter.

A 1.7% rise in private spending on the other hand helped consumption to advance by 0.3%, amid an improving underlying trend, according to Carlos Abadia, senior international economist at Pantheon Macroeconomics, and helping to offset weaker public outlays.

The external sector performed well, growing 3.0% while imports were up 0.8%.

In real terms, GDP for 2016 was only 1.6% higher, its weakest pace since 2009.

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