Chile: Economic activity growth wanes in August
Latest reading: Economic activity increased 2.3% year on year in August (July: +4.2% yoy), slightly below market expectations. Looking at the details of the release, the mining sector gained steam in August, while the non-mining sector decelerated.
On a monthly basis, economic activity dropped 0.2% in seasonally adjusted terms in August, contrasting July’s 1.0% expansion and market expectations for a slight increase. The sequential contraction was linked to school closures and blackouts due to extreme weather. Meanwhile, annual average economic activity growth rose to 1.7% in August (July: +1.4%).
Panelist insight: On the latest data and the outlook, Itaú Unibanco analysts said:
“Activity data in Chile has been especially noisy this year, affected by several transitory shocks, but overall data for 3Q24 is showing an improvement. Recently announced stimulus measures in China, Chile’s main trading partner, and a swift easing cycle in the US could consolidate a soft-landing scenario. We expect GDP growth of 2.5% this year and 2.1% for 2025 as prior downside risks to the scenario have faded.”