Chilean economy slows down in September, grows year-on-year in Q3

The IMACEC showed that the Chilean economy slowed significantly in September. Still the economic growth in the third quarter was much improved from that of the second quarter. Chile’s economy expanded 2.2 percent year-on-year in the third quarter, as compared with 0.9 percent in the prior quarter. The year-on-year rate in September came to just 1.3 percent, while the seasonally adjusted and sequential rate came in at -0.1 percent. This was the first negative month-on-month reading since March 2017.

The non-mining sector of the economy was mainly responsible for the deceleration of the economic growth. But the non-mining economy continued to be relatively stable in the third quarter. The non-mining economy grew 1.3 percent in the second quarter and 1.7 percent in the third quarter. Therefore, the major difference between the third quarter and the second quarter was the performance of the mining economy.

The mining economy expanded 8.5 percent year-on-year in September and 7.6 percent in the third quarter as a whole. In the second quarter, the mining sector had dropped 3 percent. Still, the mining economy was comparatively subdued in September, also falling 0.4 percent on a sequential basis. In the meantime, the Chilean central bank continues to be in a position to aid the economy, as inflation has come down to below 2 percent in 2017 from close to 6 percent in mid-2014.

According to Wells Fargo, the Chilean economy is expected to begin rebounding as long as the mining economy plays its part. Both mining and non-mining sectors will have to pick up from its current growth rates for the Chilean economy to expand at a more rapid rate.

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