Chile's economy likely grew by 1.8% in 2014

Relatively stronger export growth - on the back of the base effect - pulled up Chile's growth numbers in December and January to respectable levels, albeit still below trend. As a result, the economy likely grew by 1.8% in 2014 (1.7% yoy in Q4) versus growth of 4.1% in 2013.

However, recent import numbers were the weakest since H2 09 and (despite improved growth of 2.7% yoy in January) suggest that either consumption or investment demand growth (or both) continued to decelerate/fall in early 2015. 

Societe Generale notes as follows:

• Growth is surviving on the modest growth in consumption, counter-cyclical fiscal spending and - arithmetically - falling imports. The Q4  demand-side data should throw more light on the issue. 
  
  
• Although we believe that economic growth bottomed out in H2 14, there is no strong upside in sight as investment in the mining sector will likely remain depressed given weak commodity demand and prices. It should also continue to pull down other economic sectors. 
  
  
• While investment demand (and hence imports) is expected to be slightly weaker than previously expected, export growth could be marginally better in 2015. 
• As a result, we revise up our 2015 growth forecast by 0.1pp to 2.6% but revise down our 2016 growth forecast by 0.2pp to 3.1%.