Chile: Economic activity expands at fastest pace since June 2022 in July
Economic activity rose 1.8% in year-on-year terms in July, which contrasted June’s 0.8% decrease and was double the growth expected by the market. July’s figure marked the best reading since June 2022, and was due to improvements in the mining and non-mining sectors. That said, the reading was likely flattered by transitory factors. Education output rose sharply in July for instance, due to a reduced holiday period this year relative to July 2022. Moreover, recent rains buoyed hydroelectric generation.
On a monthly basis, economic activity grew 0.3% in seasonally adjusted terms in July, which was below June’s 0.4% expansion. Meanwhile, the trend improved, with the annual average variation of economic activity coming in at minus 0.9%, up from June’s minus 1.0% reading.
The economy is expected to expand in annual terms in H2 as a whole, after contracting in H1, aided by the Central Bank initiating its easing cycle in July.
Goldman Sachs’ Sergio Armella said:
“The bulk of the adjustment is probably behind us and growth, albeit below potential, is likely to resume in the second half of the year. We remain slightly more constructive on growth and expect the economy to expand 0.1% in 2023.”