SANTIAGO (Reuters) – Chile’s economy grew 0.8% in the first quarter of 2023 from the previous three-month period, data from the country’s central bank showed on Thursday, extending its still timid recovery for a second consecutive quarter after major drops seen last year.
The result came in slightly below market consensus, as economists polled by Reuters had expected a 1.0% increase in the period.
Chile, the world’s largest copper producer, faced a slowdown last year after recovering rapidly from the COVID-19 pandemic downturn, which drove inflation higher and forced the central bank to put in place aggressive monetary tightening.
The monetary authority still sees high consumer prices hindering “sustainable” growth in the Andean country in the near term, having forecast this year’s gross domestic product (GDP) to grow 0.5% in the most optimistic scenario.
The lower-end of the central bank’s outlook for 2023 stands at a 0.5% contraction, while in the next year GDP would expand 1% to 2%, less than previously forecast, according to projections released last month.
Signaling that challenges are still in place, the Chilean economy shrunk 0.6% on a yearly basis in the first three months of 2023, despite the second quarter-on-quarter growth in a row, according to central bank data.
That was, however, still better than the 0.9% contraction expected by economists in a Reuters poll.
The drop was driven by falling internal demand, which slipped 8.0% in the period due to lower investments and consumption, the central bank said in a statement, even as net exports increased.
“Activities posted mixed results,” the bank said. “Commerce and the agricultural and forestry sectors were the ones with greater downward influence, while personal services posted the main upward contribution.”
(Reporting by Fabian Andres Cambero; Writing by Gabriel Araujo; Editing by Steven Grattan)
