Chile: Economic growth slows in Q4
GDP reading: GDP growth moderated to 0.4% on a seasonally adjusted quarter on quarter basis in the final quarter of 2024 from 1.5% in the third quarter. The figure was in line with the estimate derived from monthly economic activity data. On an annual basis, economic growth accelerated to 4.0% in Q4, up from the previous period’s 2.0% increase.
Drivers: Private consumption growth improved to 0.8% seasonally-adjusted quarter-on-quarter in Q1 (Q3: +0.1% s.a. qoq). Public consumption dropped 4.7% (Q3: +1.7% s.a. qoq). Fixed investment growth fell to 0.7% in Q4 (Q3: +1.1% s.a. qoq).
On the external front, exports of goods and services contracted 1.1% in Q4 (Q3: +3.2% s.a. qoq). Conversely, imports of goods and services growth sped up to 5.7% in Q4 (Q3: +2.1% s.a. qoq).
GDP outlook: Our Consensus is for a slight acceleration in GDP growth in Q1 from the Q4 outturn, boosted by past interest rate reducations.
Panelist insight: On the outlook for 2025, EIU analysts said:
“We forecast that real GDP will grow by 2.3% in 2025. Although the economy will benefit from stronger credit growth to consumers and investors as the lower policy rate filters down to consumer and commercial interest rates, this will partly be offset by anaemic employment growth and high levels of labour informality. Another factor that will preclude higher private consumption growth will be rising electricity prices, which will weigh on consumers’ income.”