Economy bounces back in the third quarter

GDP reading: GDP increased 0.7% on a seasonally adjusted quarter on quarter basis in the third quarter, contrasting the 0.6% contraction recorded in the second quarter. The rebound was linked to recoveries in private and public spending. On an annual basis, economic growth improved to 2.3% in Q3, following the previous quarter's 1.6% growth.

Improved consumption outweighs weaker external sector: Household spending increased 0.1% in the third quarter, which contrasted the second quarter's 0.4% contraction. Public spending rebounded, growing 1.0% in Q3 (Q2: -1.5% s.a. qoq). Meanwhile, fixed investment growth moderated to 1.2% in Q3, below the 1.7% increase recorded in the prior quarter. Exports of goods and services growth fell to 1.7% in Q3 (Q2: +2.4% s.a. qoq). Conversely, imports of goods and services bounced back, rising 1.8% in Q3 (Q2: -0.4% s.a. qoq).

Slowdown expected ahead: Our Consensus is for a softer rate of quarter-on-quarter GDP growth in Q4 vs Q3.

Panelist insight: On risks to the outlook, EIU analysts said: “The greater than anticipated win for Mr Trump has raised the risk that his more hardline trade policies will be pursued. His proposals have included a potential blanket tariff of up to 20% on imports to the US. If this tariff applied to Chile, which is possible, it would weigh on Chilean exports and overall growth. Furthermore, Mr Trump's threat to impose high tariffs on China risks slowing growth in that country, which is the largest destination for Chilean goods. Domestically, the upcoming presidential election, which is scheduled for November 2025, will keep business confidence in pessimistic territory for much of next year; we expect the election to prompt a wait-and-see approach to major investment decisions.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Chilean GDP projections for the next ten years from a panel of 48 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Chilean GDP.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Chilean GDP projections.

Want to get access to the full dataset of Chilean GDP forecasts? Send an email to info@focus-economics.com.