Bloomberg News

Chilean Economy Grew Faster-Than-Forecast 5.5% in November

January 07, 2013

Chile´s economy grew 5.5 percent in November from the year before, beating estimates made by analysts on gains in the service, mining and retail industries.

The median estimate of 16 analysts surveyed by Bloomberg was for the economy, as measured by the Imacec index that is a proxy for gross domestic product, to expand 5.2 percent in November. The economy expanded 1.3 percent from the previous month on a seasonally-adjusted basis, the central bank said in a report posted on its website today.

Chile’s economy is expanding at two speeds, with retail sales growth averaging 8.5 percent over the past year, while industrial production gains 2.5 percent. Gains in consumer spending pose a threat to economic stability if internal demand doesn’t moderate this year as forecast, central bank President Rodrigo Vergara said last month.

“Greater vigor of internal demand could generate inflationary pressures,” he told senators Dec. 18 after presenting quarterly forecasts. “Greater vigor of internal demand also could widen the current account deficit.”

The two-speed economy was even more marked in November, with retail sales surging 10.7 percent from the previous year, while manufacturing expanded 0.8 percent, according to government data published Dec. 28.

As demand expands and pulls in imports, the current account gap will expand to 4.6 percent of gross domestic product this year from an estimated 3.8 percent in 2012, policy makers said in forecasts published Dec. 18. Chile’s trade surplus shrank to $4.2 billion in all of 2012 from $10.8 billion in 2011, according to a separate report published today by the central bank.

Internal demand will expand 5.7 percent in 2013 after climbing 6.6 percent in 2012 and 9.4 percent in 2011, according to central bank forecasts.

The peso was little changed at 473.08 per U.S. dollar at 8:35 a.m. local time.

To contact the reporter on this story: Randall Woods in Santiago at rwoods13@bloomberg.net.

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net.


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