Chile: Economic activity growth loses pace in May
Economic activity grew 1.2% year on year in May (April: +3.5% yoy), below market expectations. Looking at the details of the release, the mining sector gained traction in May, while the non-mining sector increased at a weaker rate.
On a monthly basis, economic activity decreased 0.4% in seasonally adjusted terms in May, which was below April’s 0.3% fall. Meanwhile, annual average economic activity growth rose to 1.2% in May (April: +1.0%), pointing to an improving trend.
On the economy and implications for prices, Goldman Sachs’ Sergio Armella said:
“Overall, real GDP readings for the past three months (March-May) have been weak. This is particularly true for non-mining activity, as mining activity has continued to be volatile. These data contrast to that of the beginning of the year when growth was very robust. Despite the central bank’s hawkish guidance on the back of a large foreseen increase in electricity tariffs, inflationary pressures on the demand side should be more contained as the output gap remains around zero.”