Chile's recent growth surprised to upside, but still below trend and not quite broad-based

Chile's growth numbers have been surprisingly better over the past couple of months despite continued weakness in trade data. Q1 demand composition, however, suggests that private demand weakness has continued along with external demand. 

Therefore, it is easier to conclude that the bulk of recent growth momentum is led by ongoing counter-cyclical fiscal spending. The government has significant room to expand the fiscal economy over the medium term. 

"However, it is considerably less certain whether this could meaningfully lift investment growth. Hence, the economy is poised to grow below potential forquite some time at least until the external demand environment stabilizes", says Societe Generale.